A Comprehensive Guide to Claiming Capital Assets: Furniture, Machines, and Laptops

Understanding Capital Assets

When you buy something for long-term business use — like furniture, equipment, or computers — it’s considered a capital asset. These are items that provide value to your business for more than one year, not everyday expenses such as office supplies or fuel.

Common examples of capital assets include office furniture (desks, chairs, shelves), equipment or machinery (printers, tools, production gear), and technology like laptops or computers.

What Is Capital Cost Allowance (CCA)?

The Canada Revenue Agency (CRA) doesn’t allow you to deduct the full cost of these assets all at once. Instead, you must claim the cost gradually over several years through a process called Capital Cost Allowance (CCA).

Each type of asset belongs to a specific CCA class, and each class has its own depreciation rate. For example, most computers and laptops fall under Class 50, which has a 55% depreciation rate. Office furniture is usually Class 8 with a 20% rate, and machinery or tools often fall under Class 8 or Class 43, depending on their use.

Example: Claiming a Laptop Purchase

Imagine you buy a new laptop for $2,000 for your business. Under CRA rules, this laptop is a Class 50 asset with a 55% CCA rate.

Because of the half-year rule, you can only claim half of that rate in the first year. So, instead of claiming 55%, you claim 27.5% of $2,000 — that’s $550 as your first-year deduction. The remaining amount carries forward, and you continue claiming depreciation each year until the full value is used up.

The Half-Year Rule

This rule simply means you can only claim half the regular CCA rate in the first year you buy a new asset. It helps balance out the timing for businesses that make large purchases late in the year. From the second year onward, you can claim the full depreciation rate on the remaining balance.

Business vs. Personal Use

If you use the asset for both business and personal purposes, you can only deduct the business-use portion. For example, if your laptop is used 70% for work and 30% for personal use, you can claim only 70% of the CCA amount.

Keeping notes, usage logs, or calendar records can help justify your business-use percentage if the CRA ever asks for documentation.

Recordkeeping Tips

Good documentation is key to staying compliant. Keep all purchase receipts that show the date, cost, and description of the asset. Maintain a simple list or spreadsheet of your capital assets, including when you bought them and what category they belong to. If the item is shared, note your business-use percentage.

You should also keep these records for at least six years after filing your return.

Common Mistakes to Avoid

Many small business owners lose out on deductions or trigger CRA reviews because of simple errors. Avoid:

• Claiming the entire cost in one year instead of depreciating it.

• Forgetting to apply the half-year rule.

• Mixing personal and business purchases without tracking use.

• Using the wrong CCA class for an asset.

The Bottom Line

Claiming capital assets correctly helps you maximize your deductions and stay CRA-compliant. Whether you’re upgrading laptops, buying machinery, or setting up a new office, knowing how to apply CCA properly ensures you don’t leave money on the table.

At TiKi Tax, we help Canadian business owners record and claim their capital assets the right way — saving time, reducing errors, and making sure you get the full benefits you’re entitled to.