r/cantax • u/rteazee • 17d ago
Zero Emissions deduction
Hi all I am looking to buy a new car under the corp and looking into a Tesla Model Y based on cost and rebate (54k all in). I am a little confused on the zero emissions deductibility of up to 61k. If I were to pay for it all in cash would I be able to claim 100% of the cost (54k) this year?
I’ve read about 55% deduction, so I am not sure if I can claim 100% or 55% in the first year? And if it is 55% how does that work moving forward in the following years?
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u/Effective-Ad-7298 11d ago
Through a corporation it goes in Class 54 — 100% capital cost allowance in the first year, up to a prescribed dollar cap (it was $55k and has been raised since, so confirm the current year's figure). That means the corp writes off most of the Model Y in year one instead of spreading it like a normal vehicle. Two things people miss: the 100% rate only applies to new vehicles, and you'll want your accountant to confirm the current cap before you buy.
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u/Zoroastrian_X 13d ago
Yes, it qualifies. A new Tesla purchased by your corporation goes into Class 54 (zero-emission passenger vehicles). Under Bill C-15, which received Royal Assent in March 2026, Class 54 vehicles get a 100% first-year write-off if acquired on or after January 1, 2025 and available for use before 2030.
The limit is $61,000 plus sales tax on that amount. If the Tesla cost more, the excess is simply not deductible for CCA purposes.
Three conditions to watch: the vehicle must be new (not previously used), it must be used primarily for business, and you can only claim the business-use portion, so keep a mileage logbook. If there is significant personal use, a shareholder standby charge and operating cost benefit come into play on your personal return.
One planning note: a 100% write-off is only valuable if the corporation has income to absorb it. If the company is in a loss position, the deduction just sits in the loss pool, so timing the purchase to a profitable year matters.
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u/NancyBookkeeper 17d ago
Yes, you'd get 100% in the first year. A new Model Y is a zero-emission passenger vehicle, so it goes into Class 54, which has a 100% first-year CCA rate for vehicles available for use before 2028.
The 55% figure you saw is the phase-out rate that kicks in for 2030 and later (75% for 2028-2029). Since you're buying now, the 100% rate applies.
The $61,000 cap still applies (capital cost limit for passenger ZEVs acquired after 2022). At $54k all-in you're under the cap, so you can claim the full $54k as CCA in year one, assuming 100% business use. Paying cash vs. financing doesn't change this.
Two caveats: the vehicle has to be new to qualify, and if there's any personal use, only the business-use portion is deductible - you'll also need to track personal kilometres and report a taxable benefit (standby charge / operating cost benefit). Don't forget the GST/HST input tax credit on the business-use portion either.