Qualified Improvement Property & HVAC in Canada | CCA Rules 2025
Qualified Improvement Property & HVAC in Canada | CCA Rules 2025 So, you’re asking: “In Canada, does HVAC count as qualified improvement property (QIP) like in the U.S. tax system?” Here’s the truth: Canada doesn’t have a QIP category like the United States. Instead, HVAC improvements are deducted using the Capital Cost Allowance (CCA) system — with classes depending on the type of work and where it’s installed. How Canada Classifies HVAC Improvements Class 1 (Buildings): Permanent HVAC systems attached to buildings are considered part of the structure and depreciated at 4% declining balance. Class 13 (Leasehold Improvements): HVAC upgrades in rented spaces may be depreciated on a straight-line basis over the lease term (up to 40 years). Class 8 (Equipment): Portable or movable HVAC units may qualify for a 20% declining balance rate. Accelerated Options (Canada-Only) Accelerated Investment Incentive (AII): Enhanced first-year write-off (up to 3x normal rate)...