Definition
The balance of a class of depreciable property still to be deducted: capital cost minus the CCA already claimed. Each year's CCA is calculated on this balance.
How it changes
UCC starts from the capital cost of the property in the class: for a building, the share of the purchase cost (price and fees, welcome tax included) that belongs to the building, since land can't be depreciated. Each year it goes up with additions and down with dispositions and the capital cost allowance (CCA) claimed.
The year's CCA is the class rate applied to the balance. Example: a UCC of $380,000 in class 1 (4%) allows at most $15,200 of CCA. Since you don't always claim the maximum, the opening UCC comes from last year's return, not from a theoretical calculation.
When you sell the building
Because each rental property costing $50,000 or more has its own class, the calculation is done building by building:
- if the lesser of the capital cost and the selling price exceeds the UCC, the difference is recaptured CCA, added to that year's rental income, on top of any taxable capital gain;
- if the selling price is below the UCC and no property is left in the class, the difference is a terminal loss, which is deductible.
Learn more
Glossary terms
Official sources
- CRA: How much capital cost allowance can you claim
- Revenu Québec: Capital Cost Allowance Guide (TPW-130.G-V)
General information, not legal advice
This page summarizes the rules in force in Québec on the update date shown, for information only. It does not replace advice from a lawyer, notary or accountant, nor the official texts: when in doubt, rely on the sources above and on the Tribunal administratif du logement.