# Rental Property CCA Recapture and Sale Tax Calculator > See how claiming capital cost allowance changes your tax when you sell a rental property: recapture, terminal loss, land and building gains, by province. Claim capital cost allowance for 10 years on a $600,000 rental (30% of it land), then sell for $850,000, and $129,863 comes back as recapture, taxed as ordinary income. In this Ontario example, claiming saves $39,494 of tax while you rent but costs $66,732 more at the sale. You end up $27,238 worse off than if you'd skipped CCA (2026 estimate). The example assumes $14,000 of net rent a year and $90,000 of other income, and it ignores what the early savings could earn. The calculator splits the sale between land and building, works out recapture or a terminal loss, adds the capital gain, and compares both routes by province. ## What is CCA recapture on a rental property? Recapture is CCA you claimed that the sale shows was too generous. When the building sells for more than its undepreciated capital cost (UCC), the difference, up to your original cost, is added to income in full. In the example the building cost $420,000, and ten years of CCA took UCC down to $290,137. The building then sold for $563,500 after its share of selling costs, which leaves $129,863 of recapture. The $143,500 above your original cost is a capital gain, and the land adds another $61,500, for a $205,000 gain with 50% included in income. ## Should I claim CCA at all? It depends on the tax rate you expect at the sale. CCA defers tax: in the example it moves $39,494 of savings into the rental years. The cost is that recapture lands in one year and gets taxed at the top of your bracket. If you sell in a low income year, such as after you retire, claiming usually wins. If you sell while earning well, skipping it can win. You can also claim part of the allowance. The [rental income tax calculator](https://tax-services.ca/calculators/income-tax/rental-income-tax) covers the yearly side, and the [principal residence gain calculator](https://tax-services.ca/calculators/income-tax/principal-residence-gain) helps if the property was once your home. ## How much CCA can I claim, and can it create a rental loss? Residential buildings usually sit in Class 1, at 4% of the declining balance, and land never qualifies. In the year you buy, the half-year rule normally cuts the claim in half. CCA also can't create or increase a rental loss, so the claim stops at your net rent before CCA ($14,000 in the example). The [Canada Revenue Agency: rental income guide T4036](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036/rental-income.html) describes the Accelerated Investment Incentive for property acquired before 2025 and a reaccelerated version after that. The September 2026 immediate expensing proposal, still draft legislation, [excludes Class 1 and 3 buildings](https://www.canada.ca/en/department-finance/news/2026/09/government-of-canada-introduces-new-productivity-mega-deduction-to-boost-canadas-advantage-as-the-most-competitive-g7-country-for-new-business-inve.html). The calculator uses plain 4% and doesn't model the incentives. ## What happens if I sell for less than the undepreciated cost? You get a terminal loss, which is usually deductible in full against income. A capital loss, by contrast, counts for only half. If the example property sold for $380,000, the terminal loss would be $55,637 and claiming CCA would cost $36,917 less tax overall. Depreciable property can't create a capital loss, though a loss on the land can offset the gain on the building in the same year. ## Where does this information come from? The CCA rules come from the CRA rental income guide T4036 and the Department of Finance notice on immediate expensing. Dollar amounts come from this site's tax engine for 2026 and are estimates. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the [full disclaimer](https://tax-services.ca/disclaimer). --- Source: https://tax-services.ca/calculators/income-tax/rental-cca-recapture Last updated: 2026-10-06 Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer