Recapture (of CCA)

Previously claimed depreciation added back to income when you sell.

Recapture is what happens to capital cost allowance when you sell a rental for more than its depreciated value: the CCA you claimed over the years is effectively added back to your income in the year of sale and taxed. It is the reason CCA is a timing decision rather than a permanent saving, sheltering income now but potentially creating a larger tax bill later. Model both ends before claiming it.

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.