Ads keep this website free for you. does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Passenger Vehicle Expense Limitations
Canadian Tax and
Financial Information Home

What's New

Links & Resources

Site Map

Need an accounting, tax or financial advisor? Look in our Directory.  Use above search box to easily find your topic!   Stay Connected with!


Home  ->  Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Automobile deduction limits

Passenger Vehicle Expense Limitations

Income Tax Act s. 13(7)(g), s. 67.2, s. 67.3, Income Tax Regulations R7307(1), R7307(2), R7307(3)

The Income Tax Act imposes limits on amounts than can be written off regarding passenger vehicles (new or used, but ZEVs purchased prior to March 2, 2020 must be new to be included as a ZEV).  The prescribed amounts for passenger vehicles purchased or leased are:

Passenger Vehicle Expense Limitations
Deduction/Threshold 2024 2023 2022 2001
to 2021
Loan interest per month $350 $300 $300 $300
Lease cost per month 1,050 950 900 800
Capital cost maximum non-ZEV    37,000 36,000 34,000 30,000
Capital cost eligible ZEVs 61,000 61,000 59,000 55,000


bulletThe maximum deduction for monthly lease costs per passenger vehicle is for new leases entered into on or after January 1, plus GST or HST and any applicable PST, less any GST or HST input tax credits claimed.  The deductible lease costs are prorated if the value of the vehicle exceeds the capital cost limit.
bulletThe maximum cost amount for non zero-emission passenger vehicles for capital cost allowance (CCA) purposes is the specified threshold plus taxes less input tax credits.  If you pay more than this, your CCA claim will still be based on only the thrershold amount plus taxes, less input tax credits.
bulletThe maximum cost amount for eligible zero-emission passenger vehicles for capital cost allowance purposes is the specified threshold plus taxes less input tax credits.  Eligible zero-emission passenger vehicles include plug-in hybrids with a battery capacity of at least 7 kWh and vehicles that are fully electric or fully powered by hydrogen.

More information re CCA and vehicles:

  1. Passenger vehicles and motor vehicles are normally included in CCA class 10 (30% CCA, 15% in the first year)
  2. Passenger vehicles costing greater than the above specified threshold are each in a separate class 10.1 (also 30% CCA, 15% in the first year, calculated on the above cost limit).
  3. A terminal loss may not be claimed for class 10.1 vehicles.
  4. Recapture rules do not apply to class 10.1 vehicles.
  5. In the year of disposal of a class 10.1 vehicle, 15% CCA may be claimed.
  6. The above threshold also applies when calculating GST input tax credits on the purchase or lease of a passenger vehicle.
  7. Zero-emission vehicles - see below.

Note that motor vehicles which are not considered passenger vehicles do not have these limitations.  See the article vehicle definitions to determine if your vehicle is a passenger vehicle or a motor vehicle.

There are also special rules set out in the Excise Tax Act, for GST registrants for claiming input tax credits on the purchase of passenger vehicles.  See:

Input tax credits on purchase of passenger vehicles and aircraft, and

Input tax credits on motor vehicle allowances.

Capital Cost Allowance for Zero Emission Vehicles Resources

All topics related to vehicles and business

What Vehicle Expenses Can Be Deducted By A Business?

Capital Cost Allowance

Canada Revenue Agency (CRA) Resources

Line 22900 Employment Expenses - Capital Cost Allowance

     - CCA Class 10.1

T2 Schedule 8, Capital Cost Allowance

Revised: December 19, 2023


Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved.  See Reproduction of information from

Facebook  | Twitter  |  See What’s New, stay connected with by RSS or Email
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.