Capital vs Current Expense

Whether a cost is deducted now or over years changes your tax.

A current expense keeps a property in its existing condition (a repair, repainting, replacing a broken item with a similar one) and is deductible in full in the year it is incurred. A capital expense improves the property beyond its original condition or gives a lasting benefit (a new roof, an addition) and is added to the property's cost, recovered slowly through CCA. Miscategorizing a big capital cost as a repair is a common and audited error.

General information only, not legal, tax, or financial advice. Rules change and vary by province; confirm the current details with the relevant authority before you rely on them.