Thanks for your efforts to make this video. Just one question here: If I bought a PHEV in 2020 and have been using it until this Dec, 2022, then I trade it in for a Tesla or BMW or some other band's fully electrical vehicle in Dec 2022 for real estate business purpose, Can I claim the $55k plus GST 100% for 2022 tax return along with the CCA for the original PHEV together?
Thanks for providing the link to the gov't website. I see this does not apply to used cars and I understand how you got the $28k benefit now: $55,000 + HST * 90% business use assumption * 50% tax rate assumption = $27,967.50. Thxs greatly!!
The government did propose that they would expand the criteria to include used vehicles as well. It was indeed being pushed again in the last budget announced. Stay tuned if you are interested in buying a used vehicle.
Your video is so valuable for Canadians. i think you are limiting your audience by only focusing on real estate tax tips. You should also focus on overall Canadian business owners too. One video suggestion would be to if you can make would be too-- What kind of businesses can tax write off a EV Car apart from real estate and sales folks. that would be really valuable.
Appreciate your feedback. We're constantly evolving. Creating these videos is a commitment on its own. You'll see an answer to your question in an upcoming video.
Can you apply the same concept to uber/lyft ride sharing for EV. If federal incentive is taken at time of purchase. Maximum is $30000 over 6 years like the Odessy?
Do you need to incorporate to claim this or can you claim as a self-employed Realtor? Been on the phone with CRA for a hour and a half now and you answered almost all my questions in a 4 min video!
@@RealEstateTaxTips Is there a specific way the car must be registered in the case of a self-employed Realtor? I have instructed Tesla to not file for the $5000 rebate to be eligible for the write off. Thanks again!
This is great info thank you! is the immediate tax savings only if you pay for the vehicle outright? Or also if you finance the vehicle for 5+ years. Also does this also work for leased vehicles as well?
Absolutely but it has to be based on the business use % of it. Good luck! Make sure you also consult with a professional accountant before making the purchase.
Do I have to make a certain amount of money to claim the full amount of the car? And what happens in year 2 or 3 if you buy another one for yourself and give the old one to the wife?
The deduction available is really based on the business use or employment use of your vehicle. The more you make personally, the higher the saving given that you're also taxed at the highest marginal tax rate. If you do choose to buy another car in the future and let your wife uses it altogether, you will get the new deduction (this incentive ends 2024 altogether) provided that you do the purchase before 2024. Make sure you reach out to our team for proper consultation before purchasing.
What I find annoying is the lack of instruction from the CRA as to the disposition. I can’t find any formulas that include the business use portion when determining the UCC.
Really helpful Cherry. Being a property manager employed full time who uses a car for 90% work related - can I take advantage of this tax savings on my employment income?
If you have a T2200 specifying that your employment requires you to use your vehicle for employment purpose, you have a proper log and documentation, then you should be able to claim the similar tax deduction. Be sure to consult with your own CPA to get a better understanding.
Thank you for bringing this to my attention. What exactly is this low emission incentive called? Also, how does it apply to leasing the Tesla rather than purchasing it?
Unfortunately this incentive isn't available if you were to lease the car. To take advantage of this incentive, you will have to use your vehicle to earn taxable income in Canada. You find out more in the CRA website: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties/zero-emission-vehicles.html
Hi Cherry, love your videos! I have a couple questions. 1. The government website says if a car is eligible for the Zero-Emission Vehicles (iZEV) Program incentive, then the 100% depreciation rule cannot be applied (only the 30% rule applies). Therefore, any car on the list you showed in the video would not be able to qualify for the 100% depreciation, correct? 2. I thought if I had a HST number, then the HST calculation is separate (HST to pay back to CRA = HST collect - HST used during that period). Here you are putting both HST and the actual expenses together to do the calculation. Could you shed some light? Thanks!
Feel free to watch the follow up video here... th-cam.com/video/89bHePnHJ48/w-d-xo.html This may help you with your Q1. HST calculation is a complicated topic. I did have a blog post written on this exact topic. Please visit RealEstateTaxTips.ca and search for HST vehicle and you will see the topic How to Maximize HST Claims When Purchasing a Vehicle
It gets a bit more complicated if you conduct your business inside a corporation. If you conduct your business in your personal name, it is easier to claim the deduction.
Saving calculation will be different depending on what you do in your corporation and how you use the vehicle for business purpose. This may trigger adverse tax implication depending on the business use % of your vehicle. Be sure to consult with your accountant before making the purchase.
@@RealEstateTaxTips Thanks for the reply! I'm a realtor and business use is almost 90%. Is there a different formula to calculate CCA under corp? Thanks again!
Thank you for such a detailed review of this process. I will soon start working as a therapist under the model of an independent contractor. Does this incentive differ for pure business owners as compared to independent contractors?
Depending on how you structure your business, if you need to use vehicle for business purpose, this can provide tax savings for you. Be sure to consult with someone that understand tax rules in this area before you set it up.
@@panijefer when you sell your car and stop using it for business use, you're supposed to prorate the amount of sale price in relation to the purchase price. Based on the business use of that year, business portion of that is taken into income as recapture.
Hi John, great question. I used 50%, pretty much highest marginal tax rate in the personal tax system. If you own your vehicles inside your corporation and do no use it primarily for business purpose, significant standby charge could be imposed on your personal tax return. Yes, you might pay 12.2% in the corporation, but you would then also have to pay for the availability of a company vehicle in your personal tax return.
Your video is very informative Can u explain the 50000 will only apply on purchase or lease as well Also if you buy under your name and can claim under your. Business account
Hypothetical question. If your business income is, let's say, $5000/year and you are a sole proprietor, can you use this tax credit to lower your fulltime job taxable income?
Hi Aamer, if you use the vehicle primarily to run your business, hypothetically you can claim the deduction against your business income that would create a loss. The loss can be offset against your full time job income. However, this may also trigger an audit, depending on how big a loss you are claiming. In your situation, it's best to speak to someone knowledgeable before making the purchase.
This really goes back to how often you drive your vehicle for work (not your store). Mileage driving to your store (or called office) does not count as driving your vehicle for business purpose unfortunately. You would still be qualified, it just would not give you as much a saving.
This is really wonderful explaination, My Question is I am full time employee at one of big HVAC copany in toronto, but i get paid 100% commission as my salary, and I do have to use my own car to make sales. I dont get any CAR Allownace from my Emyployer. Can i also get this EV tax benefits. say i make avg 100K a year in commissions. is it benefial for me ?
Hi Cherry, really love your video topic! You help lots of Canadian taxpayer! One question, I am a salesperson working in a corporation requries me to visit clients for business generation. My company provides me a T2200 stating my job duties of driving amongst clients and my salary includes a fixed "Car Allowance" payment for few hundreds per month. So if I buy a Tesla in 2022, of coz I cannot get any EV tax benefit from federal nor province since Tesla price over $55k. Could I still get any tax benefits as you said in the video under Class 54 no matter I purchased it in full or under finance? How about interest of the finance? Car expenses, say electric bills, car wash, dashcam purchase and installation, car body protection film.
If T2200 is provided by your employer, you can write off the business use of your new Tesla against your employment income as well. Interest expense on financing is also tax deductible. Car expenses, such as charge expense, car wash, dash cam purchases, etc. are also considered maintenance expense. The business use portion of them can also be written off provided that you are using your vehicle for the purpose of earning employment income. You will need strong documentation.
Question ! I’m getting the model 3 range plus for under 55000 thousand dollars . I’m eligible In Bc for 8000$ off Ev incentives , if I received the incentive can I still claim the write off for my business use of the car ? Thank you in advance for responding ! Love your Chanel
If you get incentive, you will not be eligible to qualify for the extra write off. You can still qualify for $30K write off though. It sounds too good to be true that you purchased a model 3 range plus for under $55K. For the write off $55K to work, the car has to be brand new.
Hi Cherry does it make a difference which month in the year we buy the Tesla? My wife has been a self employed realtor for many years and have claimed 90% business use of her car. If she buys the tesla in Nov will she still be able to claim the 90% (she will not claim the older car to avoid double counting) Or is she limited to claim a lower amount because there is only 2 months of driving left in the year? thank you
Hi David, feels like I already answered this question before but I guess I never did. Doesn't make any difference which month you purchase your vehicle. You get the same amount of deduction - assuming that your wife is a sole proprietor. Corporation may be different with first year of incorporation.
Three questions... 1. Consider a scenario where I have two jobs. Job one I am self employed or independent contractor status and job two I am paid a salary by my employer. Can I combine the two incomes at the end of the year and write the car off against that combined income or does it only get applied against job one's income (the self employed income). 2. Does the vehicle (assume a Tesla) does it have to be brand new or can I purchase a used Tesla and claim the one time write off? Note that in this scenario the maximum deduction limit may be the exact same value as I paid for the car, as its used and would be less expensive than in your example. 3. If after you claim the one time tax credit in year one (as in your example), then in year two, you sell the car for the same price you paid for it, could this trigger a recapture in the second year's taxes? Thanks is advance.
Hi Cherry great video. Just one question Does is matter which month of a year you buy the tesla car. Lets say if I purchase in November 2023 . Can i still deduct 100 %($55000) CCA for 2023? . Thanks Cherry
Doesn't matter whether it is December or January - you still get the same deduction - assuming you have been in operation beyond the first fiscal year.
Hi there. In a previous video you mentioned that the tax deduction from an EV (e.g., Tesla) is a one-time deductible. Did I misunderstand? For example: I should claim 100% of the total purchase price (multiplied by % business use), instead of claiming 50% this year and 50% next year?
It allows you to claim a one year deduction, but you can also choose to carryforward the undeducted balance to future years. From second year onward, you can claim 30% on the undeducted amount on a declining basis.
hello this spetaular does it apply in Toronto? im moving soon to study and work and im trying to make a buisness model with the robotaxi plan of tesla, this really is helpfull but I WOULD love to see a more detailed explanation for how taxes work and where an I see this laws?
I know very little about robotaxi plan. If you are operating a business in Canada, this tax incentive is available to you. :) Good luck and all the best!
@@RealEstateTaxTips is it good that you know very little about it? haha and also thank you very much !! but one more thing where can I see this laws???
@@MrRaysuli it isn't a direct incentive that you get. It is a saving that you get to obtain if you have a business - here's from CRA's website about the extra tax incentive. www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties/zero-emission-vehicles.html
Great video, I ordered Tesla model Y. went on the CRA site and as of November 23rd Tesla is not on the list anymore. And because it's more than 45,000 I don't have any credits from purchase or tax write-offs now. Anything else I can do that you know of ?
Hi Richard, Thanks for reaching out! Every individual's situation is unique. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca
Thanks for the updated video notice, definitely answered all my questions. Always appreciate you putting out amazing content and very useful tips for us!
This can only apply if you are required to use your car to travel for employment purpose. Some of my clients are required to use their own vehicles for employment purpose and they can deduct a portion of the car. If you routinely commute to and from your office, it is highly unlikely this applies.
Will this work for my wife’s sole proprietorship if she’s listed as a co-registrant on our upcoming Mode 3? Reason for this is a) to have financing under my name and b) if we take delivery right before she gets her license later this year. We’ll be writing off about 50% for business use. Thank you!!!
@@kyleltg just to clarify though, the $28K savings mentioned is based on personal taxes. If you are owning a vehicle in your corporation and does not use it primarily for business purpose, it can trigger some adverse tax impact. Be sure to consult with your accountant. If you aren't working with someone, feel free to reach out to our office. All the best.
@@RealEstateTaxTips We don't have a corporation. Rather, she'll be using ~50% of the car for her sole-proprietorship and therefor we'll write off ~50% off the car. CRA said this was OK. The Tesla dealership actually said we needed to be incorporated, which was misinformation on their end. Thank you for sharing! :)
@@kyleltg definitely misinformation - but I always bring my skepticism with me when I'm not talking to professionals when they are giving out advice that is not within their trades.
Thanks for this video! If the price of a used Tesla is over $61,000, are you able to claim $61,000 deduction from taxable income in addition to ITC in HST on top of that?
Hi dear , I have one question , my Tesla is coming on 22 of this month , I got rebate as per British Columbia rules , as I’m financing how I can write off ? Thanks
Since you are getting the rebate, you would not be able to qualify for $55K Class 54 write off, but you will still be qualified for $30K Class 10.1 Financing or purchase with cash would not make any difference in this case.
Hey Love the video I have a question I am self-employed and I have a small landscaping business and I was looking in to the Tesla model Y for 95% business use so I am able to get around and secure more contracts and clients. Would I be eligible for the Deduction
If you use your vehicle for self employed business, and you use it for 95% of the time and have proper documentation to support it, you should be eligible for the deduction. Make sure you consult with a professional accountant that knows your situation better. And again, you're welcome to reach out to our office if you need help.
Hi Ron, it goes to how much you use your vehicle to manage your rental properties. The higher the %, the more the deduction. It isn't about the amount of net rental income you are receiving. It is the business use of the vehicle that matters.
@@RealEstateTaxTips thanks for the clarification! I guess this will work and people will get the refund as you said. The only issue I can think of is if the rental income is low, the high vehicle expense will lead to rental loss on the CRA tax slip and the CRA may not like that.
Are all these numbers (like the $13,000 or $28,000) just deductions to income? So way oversimplified, but if my income is $100,000 and I bought a Tesla and it was 50% used for my business, how much would be taken off my taxes in the first year? Or how much less would I have to pay in taxes roughly.
Taxes saved would entirely depend upon the taxable income that the deduction is being claimed against. I would recommend you schedule a consultation with my team to help you determine your potential savings.
Hello Cherry, if the year I bought the Tesla is the year that I didnt make much profit, is the $55,000 Tax Credit Carry over for the next year? Thanks & more power
Do you need to buy the electric vehicle under your company name to take advantage of this tax savings? Also, what would be the advantage of purchasing the vehicle under your company name vs personal name?
You can take advantage of this deduction whether you own the car in your personal name or in the corporation. Mind you though, the corporation owned vehicle might pose significant tax issues on your personal name if you do not use the car for business use all the time. It is way more complicated when you own the vehicles are owned in the corporation's name.
Awesome video, very interesting. I was concidering getting a Tesla model 3 for my business, it would be 100% business use. The car purchase price is 54 290$, I would be financing it. My business sells for 1.5 Million and profits around 150k a year. What kind of savings Im I looking at here on the Tesla? I also live in Quebec which also gives another 8,000$ for EV vehicle. Thank you so much.
Be mindful of any government subsidies that you are getting. If you get them, chances are you wouldn't be eligible to qualify for the extra tax saving. It might still be worthwhile to get the $8K instead of bigger tax saving, depends on your situation. Make sure you consult with a professional accountant that understands this area of tax.
The 2021 budget did announce the plan to allow taxpayers to purchase used EV, but this still hasn't been passed to law yet. So, as of now, the answer is no.
Hi Cherry, I am thinking for taking advantage of this. I am real estate investor who has a rental condo that is 20km from me and an Airbnb that is 106 km each way and I visit the Airbnb at least once a week and do not want to add KM to my personal as I use that for my daily Commute . Can I take advantage of this
Hi Sunil, it is really difficult to tell whether it is beneficial to you or not, just from this message. Make sure you consult with an accountant who knows about how to apply this strategy before you make your purchase. Good luck.
If your employer requires you to use your automobile for employment purpose (normally they would issue a form called T2200 to specify the type of employment expenses that they require you to incur for the purpose of performing your duty as an employee), you can obtain similar type of benefits, based on the employment use of your automobile.
Thank you for your knowledge of tax regulation. I read the CRA website and understand that I need to claim CCA under class 54 for my car. But it said we could claim max $55k for 2019 only. Do you know how much threshold for 2022?
$55K is the max you can claim when you purchase a new car without claiming any government subsidies. Same amount in 2022 if you purchase your vehicle in 2022.
@@RealEstateTaxTips Many thanks for your information. I posted another question here but it looks like being removed, so I tried to post again, I have 2 questions and hopefully you could answer: 1- Is this Zero-Emission Vehicles only applied to electric engine only like Tesla? Can plug-in Vehicles as listed on this below website like Toyota RAV4 Prime, Mitsubishi Outlander PHEV also be qualified ? tc.canada.ca/en/road-transportation/innovative-technologies/zero-emission-vehicles/list-eligible-vehicles-under-izev-program 2- As defined under class 54: There is a limit of $55,000 (plus federal and provincial sales taxes), it means I could claim up to $55,000 + HST = $62,150. Am I correct? With all the best.
@@miken9382 hi mike, I don't follow cars so I can't really say which type of plug in EV qualifies. My recommendation is that you check in with your accountant to specify your question. Having said that, my understanding generally is that plug in hybrid would apply to class 54. With respect to your second questions, it really goes back to the province you are in, and how you use your vehicle as well. Again, it is a specific question to your own accountant. :) Depending on the type of business you're in, there're different ways to claim your HST as well. Good luck.
No. iZEV provides rebates - whether you own a business and use your vehicle for business or not. You would still qualify for the rebates. As for the tax write off, you MUST use your vehicle for business to qualify for the write off.
@@RealEstateTaxTips ok sounds fantastic! Sorry to reply to your answer with another question but would a rental property 1000 kilometers away from my primary residence be an amendment to my primary business of merchandise sales? Eg. home repairs
Hi Lis, you will have to keep a log book on your vehicle. When CRA performs an audit, they ask for your logbook as well as the vehicle maintenance record as a corroborative evidence. Hope it helps.
Hi can I do this if I financed the Tesla? I purchased in December 2021 and use it for 90% business. Can I do the frost tax write off for 2021 or would it need to be for 2022? Thanks
The write off is available in the year of purchase, assuming you are using it for business use. You can find more detail explanation in the latest video - th-cam.com/video/89bHePnHJ48/w-d-xo.html
Great video! could you please explain when you say deduction of $9,153 what does it means? I do not pay tax on $9,153?My taxable income will get reduced by $9,153?
I think this is incorrect. Class 10.1 (vehicles > $30k) can only claim 15% CCA in first year (half-year rule). Also it seems for the 100% HEV class (max $55k), I believe you are NOT allowed to take any federal incentives, for instance the $5k iZEV credit. I could be wrong but it seems to be written that way.
Class 10.1 has a maximum amount you can claim $30K + HST. Currently there's no half year rule so first year it is still 30%. This will be lifted in the future. As I mentioned a few times, you cannot receive any government rebate (in the case of Tesla, I don't think it qualifies anyway) at purchase to qualify for the bigger deduction. Hope this helps.
Hi Cherry great video. If I buy the car in cash electric or non electric let's say for 50,0000. Can I deduct this as an expense for that particular year ?
You can deduct the business use portion of the vehicle assuming you are using it to drive around for business purpose. If you are using it for employment purpose, then it depends on whether you need it for employment or not.
@@JAGDEEPsingh-vi3xi as long as you have a T2200 issued by your employer specify that you need to use your vehicle and have a proper supporting document to substantiate your claim... you should be able to claim the employment use of your vehicle
If you take the maximum write off in year 1, then unfortunately there is nothing left in year 2. If you didn't take the maximum write off in year 1, chances are, you will be able to write off the remaining balance in the following years.
Could you please provide some more details about $28,000 tax savings. For Ontario ev inc is $5000 and for 50% tax bracket it will be $14,000. Is there any additional deductions available?
Not sure if you had watched the whole video, but at the time this video was made, Class 54 - which is what the EV would be claimed on your business tax return, has a maximum deduction of $5,000 plus HST. Our example assume 90% business use. So $55K + HST x 90% = $55,935 write off available. Assuming tax rate of 50% - $56K x 50% = $28K tax savings. Also want to mention that you CANNOT claim any government rebate on EV to qualify for the big write off. Hope it helps.
Is this 28,000 a carry forward? For example.is the 28k write off in year 1 of the corporation to bring the net income to zero or can we carry forward the losses to year 2?
$28K represents the potential tax saving. You can deduct the expense in year 1 and carry forward the loss or you can opt to deduct the expense over a couple of years as well so that you can carry forward the deduction to year 2.
Thank you for for information I was asking that I am an Uber driver and I want to buy an ev car for doing Uber. I was wondering if I am eligible for this program. I will appreciate for the answer. Thank you Ahmad
My wife is an incorporated realtor and pays out a salary (T4 income). Can she buy the Tesla personally and then claim the CCA on form T777 as employment expense? or will this cause an issue as she is not dealing at arms length with the corporation? thank you
Claiming it as T777 employment expense is a common way used by many of our clients. Make sure you speak with your accountant to get a better understanding of what is required for documentation purpose.
@@RealEstateTaxTips thanks Cherry. Does this special deduction apply for buying a used or second hand Tesla? The wording on the govt sites seem to indicate no as they say that the car cannot be used for any other purpose prior to you buying it.
@@dwu02 It is in the federal budget two years ago to allow used vehicle but covid hit and it never came into effect. It was also in the current year federal budget but again, because of election, the legislation still has not come into effect. At this point I am not sure when and if used e-car would be acceptable.
Hello Ms Chen, inorder to write-off the Tesla 100% does that mean one has to pay for the car off 100% at the time of purchase or can the business finance the car? (Lets say I made a down-payment of $20,000 and finance $30,000) how do I write this off?
The write off is based on the purchase price of your car. You can borrow to purchase the car, you can pay it off all at once. The key is that you have to purchase the vehicle and use it for business purpose to qualified for the write off. Hope this helps.
@@RealEstateTaxTips You are a wealth of knowledge! It seems like the structure is 1. Buy in our personal names 2. Use it for business and claim it. Is that right? If we receive the tax benefit in year 1, would it make sense (possibly) to then sell the car in year 2 since we've already maxed out the tax deduction benefit?
@@ianpoulin haha, unfortunately if you sell it immediately for a higher price, there's something called recapture tax. Nice try, but can't do it. If you purchase your vehicle in your personal name, and use it to run your business in your corporation, just make sure you are paying yourself enough from your corporation and have the appropriate form issued to allow for the deduction.
Hi Anuj, If you are travelling to your office, you cannot claim the mileage you commute to your office generally speaking. Unless you're required to work from home and your employer issues a T2200 for you to confirm that you are required to use your vehicle for employment purpose.
would having your business vehicle wrapped with your business name and website count as advertising 100% of the time? which means the vehicle is used for business 100% of the time? So that even if you drive sometimes for personal it wouldn't matter because your vehicle is advertising for your business. Thoughts?
@@RealEstateTaxTips i understand but wouldn’t the fact that it’s an advertisement Everytime I drive around could I not write off a monthly reasonable amount for advertising cost plus the cost of the wrap?
Hi Cherry, i will have my tesla arrive in 2 months time. Im planning to lease it, is the write off for this still capped at 800$/month as stated on cra site or is there different benefit for EV cars?
@@RealEstateTaxTips haha well, the website shows june/july delivery, so I assume there isn't a delay yet. When would they update you if there is a delay? Would you think financing the vehicle is better for write off purposes? I personally just didn't want to keep the vehicle after 4 years because I don't know how the battery health would do in that time in the future. (It's like your phone battery dies after around 2-3 years of using it)
Great video! If you're using the electric vehicle for business, can you obtain the federal rebate (living in Ontario so no provincial rebate at the time) and still also qualify for the tax rebate?
Hello, I am married and filing joint every year. we have a double house (2 units together). we lived in one unit and rent out one unit and claim tax every year as a rental property. we sold the house for $435,000 for both the units. they give us a 1099-S and report as one $435,000. how do I report on my tax? what tax form do I use form 4797 or form 8949 or other form to calculate the capital gain on the one unit rental property that I sold? how do I report on the form to excluded the main home (one unit that i lived in)? the form 1099-S issued only one price.
Hi there! As every case in unique, I'd advise to you to sit down with a professional to help you with all your real estate tax concerns. You can come in or phone consult with me and my team. For any personalized consultation, we advise that you book an appointment. Feel free to contact us at 416-548-4228 or email us at admin@cccpa.ca.
The deduction is restricted to the amount of business use (rental use in your case). If you drive often to manage your properties in relation to your personal use (including employment use), it is likely you get a bigger deduction (and bigger tax savings)
Great comment. HST claim is based on the type of business your operated, your business use of vehicle - you can find out more about the HST claim on the vehicle via this blog post I did a few years back realestatetaxtips.ca/how-to-maximize-hst-claim-when-purchasing-a-new-vehicle/ It isn't a 100% benefit unfortunately, goes back to exactly the % of commercial use vs. % of personal use and even if it is 100% commercial use, there's a cap on the amount of HST you can claim.
I invested in pre construction condo and have it under my personal name. Once it closes can I claim the deduction under my name? Do I qualify as a landlord?
What about leasing a Tesla? If I would put $55,000 downpayment would that be a complete write off? And I can still claim $800 a month write off on the lease payment
Leasing a Telsa would not require you to put $55K down. Sorry I am confused about what you are trying to ask. Feel free to call us for a consult at 416-548-4228 or email us at admin@cccpa.ca
@@RealEstateTaxTips This only applies for Model 3 right? As the other models are not listed on the "List of eligible vehicles under the iZEV Program" page
hello, i have a rental property that brings in about 3500$x 12=4200$ yr also i drive uber full time which brings in an additional 50000$ totalling about 100000 yr. i pay about 2000$ in income tax last year. with this would i be getting a tax refund check. if so i plan to pay against the financing amount of the tesla model y. thank you. and would my accountant understand the info you've provided in the video.
Hi there, Thanks for reaching out! I'm glad you find them helpful. I'm not sure what is the understanding your accountant will have. But, if you have any questions or need a consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca
Used cars including EVs can be deductible in general, but only governed by the same rules as the regular cars (non-ev). So deduction amount is based on actual amount paid, and maximum deduction would be $30K plus HST even if you buy a used Tesla that's way over $30K.
@@RealEstateTaxTips so the 100% first year write off is only applicable to the new vehicles that are in the list of eligible vehicles ? For example: Tesla is not in the list anymore, which means tesla will now fall under regular cars category($30K + HST)
HI Cherry, can one continue to write off into the years following the first year of deducting 100% accelerated CCA? For eg. if the first year deduction was 55000*100%(100% business use) * 50% (tax bracket). Can you also continue to write off the monthly payments and interest after writing of the CAA?
You're allowed to write off the interest payment on an ongoing basis. With respect to the vehicle purchase, you can only have maximum write off of $55,000. If you don't claim $55K (assuming 100% business use), you can carried the undepreciated amount to future years to claim.
Awesome vid! As a first time business owner this year in BC, I find this pretty interesting. Does this apply in BC as well? and how does the write off work? Claimed in tax season? Very new to all this so sorry if these have been explained already! Thanks so much!
Well, this write off is only available if you do NOT take any government incentive. You will also need to use your vehicle to run your business to maximize any tax write off as well. Be sure to speak to your accountant, and if you don't have one, we're always here to help. Feel free to reach out to our office.
If you are 100% commission employee and receive a T4 from your employer, you will have to obtain T2200 from your employer indicating that you are required to use your vehicle for work...in order for you to be eligible to claim the automobile expenses. You can watch the newest video explaining it as well. th-cam.com/video/89bHePnHJ48/w-d-xo.html
Is this only limited to businesses? Or do self-employed(Uber) qualifies for this program as well? Also, does it have to be a 1 time write off or you're allowed to spread it over 2-3 years?
Driving Uber is a self-employed business. Depending on the business usage of your vehicle for Uber driving purpose, you can take advantage of this program to a certain extent.
@@RealEstateTaxTips A follow up question. I see that you could also deduct stuff like insurance cost, fuel cost and etc. So, is the actual deductible amount something like the 30k + hst + others costs? Or you can only pick one out of the two?
Hi Mee28, thanks for your comment. The $28K saved is purely calculated on the personal tax highest marginal tax rate in Ontario. The video isn't created to calculate and illustrate how corporate owned Tesla would have a huge impact on personal tax. And at the end of the day, the amount of taxable benefits are also calculated based on the business use % of the vehicle within the corporation, if taxpayer choose to own this vehicle inside his/her corporation.
@@RealEstateTaxTips Thanks for the quick reply. To clarify, the Tesla Model 3 I purchased in June 2019 under my personal name and used for business purposes, can claim this $28K benefit with my T2022 from my employer. 90% of this vehicle is used for business purposes.
Class 54 is available for eligible vehicles acquired after March 18, 2019 and before January 1, 2028. It is gradually being phased out starting in 2024. :) You will still have it available (maybe on a reduced amount) until 2028.
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We had made another video to answer the most asked questions here:
th-cam.com/video/89bHePnHJ48/w-d-xo.html
Thanks for your efforts to make this video. Just one question here: If I bought a PHEV in 2020 and have been using it until this Dec, 2022, then I trade it in for a Tesla or BMW or some other band's fully electrical vehicle in Dec 2022 for real estate business purpose, Can I claim the $55k plus GST 100% for 2022 tax return along with the CCA for the original PHEV together?
@@stanleycui807 sorry didn’t see this earlier. It goes back to the class that your PHEV was in. And there are special rules around this.
Thanks for providing the link to the gov't website. I see this does not apply to used cars and I understand how you got the $28k benefit now: $55,000 + HST * 90% business use assumption * 50% tax rate assumption = $27,967.50. Thxs greatly!!
The government did propose that they would expand the criteria to include used vehicles as well.
It was indeed being pushed again in the last budget announced. Stay tuned if you are interested in buying a used vehicle.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
love this video. one question, should i buy the car under bsuiness name or personal? i use the car mainly for the business.
Your video is so valuable for Canadians. i think you are limiting your audience by only focusing on real estate tax tips. You should also focus on overall Canadian business owners too. One video suggestion would be to if you can make would be too-- What kind of businesses can tax write off a EV Car apart from real estate and sales folks. that would be really valuable.
Appreciate your feedback. We're constantly evolving. Creating these videos is a commitment on its own. You'll see an answer to your question in an upcoming video.
@RealEstateTaxTips appreciate it. Looking forward to that video.
I love your videos. I plan to watch all tonight
Hope you find some useful information there!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
2:14 had me dying lol
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Can you apply the same concept to uber/lyft ride sharing for EV. If federal incentive is taken at time of purchase. Maximum is $30000 over 6 years like the Odessy?
This is great. Thanks for such a clear explanation!
Glad it was helpful!
Do you need to incorporate to claim this or can you claim as a self-employed Realtor? Been on the phone with CRA for a hour and a half now and you answered almost all my questions in a 4 min video!
You can get this tax credit in a corporation and working as a self-employed realtor. Both work.
Good luck!
@@RealEstateTaxTips Is there a specific way the car must be registered in the case of a self-employed Realtor? I have instructed Tesla to not file for the $5000 rebate to be eligible for the write off. Thanks again!
@@needanagent I'm self-employed and I don't think it needs to be registered any special way. Just keep all receipts in case of audit :)
@@petersommerfeld6600 thanks Peter! Lovin my model 3!!!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
This is great info thank you! is the immediate tax savings only if you pay for the vehicle outright? Or also if you finance the vehicle for 5+ years.
Also does this also work for leased vehicles as well?
You can finance the car purchase and still get immediate tax write off
You can also watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Does it work if lease or you need to buy it ?
Great video! Can you please do a comparison of leasing versus financing a Tesla in a company name?
Great suggestion! We'll take that into consideration. Thank you!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Thank you for the great video.
Does this apply to a cash purchase, lease, finance or some of the above?
Beh, it applies to cash purchase and finance deal as well... lease is a different calculation altogether so it is claimed differently.
@@RealEstateTaxTips Thank you for the reply.
In therms of tax claims, does leasing an EV has any advantage over gasoline vehicles?
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
hi great videoi own a forplex so can i have that $28000 deduction to by a tesla ? or u need a differents bussenesd to be allow??
thanks.
Hi cherry thanks for a wealth of knowledge. Does this tax credit apply if you drive your EV as a uber or lyft?
Absolutely but it has to be based on the business use % of it. Good luck! Make sure you also consult with a professional accountant before making the purchase.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Do I have to make a certain amount of money to claim the full amount of the car? And what happens in year 2 or 3 if you buy another one for yourself and give the old one to the wife?
The deduction available is really based on the business use or employment use of your vehicle. The more you make personally, the higher the saving given that you're also taxed at the highest marginal tax rate.
If you do choose to buy another car in the future and let your wife uses it altogether, you will get the new deduction (this incentive ends 2024 altogether) provided that you do the purchase before 2024.
Make sure you reach out to our team for proper consultation before purchasing.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Can you do an update on this for 2023? Or does this still apply today. Thanks!
Sure. Will keep that in mind for our next months' video production
@@RealEstateTaxTips thx!!
What I find annoying is the lack of instruction from the CRA as to the disposition. I can’t find any formulas that include the business use portion when determining the UCC.
Welcome to my world :)
Really helpful Cherry.
Being a property manager employed full time who uses a car for 90% work related - can I take advantage of this tax savings on my employment income?
If you have a T2200 specifying that your employment requires you to use your vehicle for employment purpose, you have a proper log and documentation, then you should be able to claim the similar tax deduction.
Be sure to consult with your own CPA to get a better understanding.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Thank you for bringing this to my attention. What exactly is this low emission incentive called?
Also, how does it apply to leasing the Tesla rather than purchasing it?
Unfortunately this incentive isn't available if you were to lease the car.
To take advantage of this incentive, you will have to use your vehicle to earn taxable income in Canada.
You find out more in the CRA website:
www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties/zero-emission-vehicles.html
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Hi Cherry, love your videos! I have a couple questions.
1. The government website says if a car is eligible for the Zero-Emission Vehicles (iZEV) Program incentive, then the 100% depreciation rule cannot be applied (only the 30% rule applies). Therefore, any car on the list you showed in the video would not be able to qualify for the 100% depreciation, correct?
2. I thought if I had a HST number, then the HST calculation is separate (HST to pay back to CRA = HST collect - HST used during that period). Here you are putting both HST and the actual expenses together to do the calculation. Could you shed some light? Thanks!
Feel free to watch the follow up video here...
th-cam.com/video/89bHePnHJ48/w-d-xo.html
This may help you with your Q1.
HST calculation is a complicated topic. I did have a blog post written on this exact topic. Please visit RealEstateTaxTips.ca and search for HST vehicle and you will see the topic How to Maximize HST Claims When Purchasing a Vehicle
Great video! Does the vehicle need to be under business or is it ok to be under personal?
It gets a bit more complicated if you conduct your business inside a corporation.
If you conduct your business in your personal name, it is easier to claim the deduction.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Great video! Do you know if this still applies if you’re buying under your corporation as the sole owner of the Corp?
Saving calculation will be different depending on what you do in your corporation and how you use the vehicle for business purpose. This may trigger adverse tax implication depending on the business use % of your vehicle.
Be sure to consult with your accountant before making the purchase.
@@RealEstateTaxTips Thanks for the reply! I'm a realtor and business use is almost 90%. Is there a different formula to calculate CCA under corp? Thanks again!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Does plug-in Hybrid Cars quality for the same write-offs?
Thank you for such a detailed review of this process. I will soon start working as a therapist under the model of an independent contractor. Does this incentive differ for pure business owners as compared to independent contractors?
Depending on how you structure your business, if you need to use vehicle for business purpose, this can provide tax savings for you.
Be sure to consult with someone that understand tax rules in this area before you set it up.
You can also watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Incredible video, thanks for sharing. What happens if I buy a Tesle with the incentive and I don't have enough income for the year to deduct $28.000?
You can defer the deduction to the following year to deduct it. But the key is that you are using your vehicle for business use.
@@RealEstateTaxTips how that works on capital gain tax reduction after selling an investment/rental property?
@@panijefer when you sell your car and stop using it for business use, you're supposed to prorate the amount of sale price in relation to the purchase price. Based on the business use of that year, business portion of that is taken into income as recapture.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Thank you for sharing this Cherry. How many years does one require to keep that qualified Low Emission Vehicle?
You can sell it the year after, but then there's recapture tax implication. So something to think about.
@@RealEstateTaxTips thanks Cherry. So gotta keep it for 8 years to avoid recapture implications?
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Can you also get the federal rebate off MSRP when you apply this strategy?
Great question. To qualify for extra deduction, you cannot get any federal rebate unfortunately.
Ok what about provincial rebate?
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Great tips!
Glad it was helpful!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Hello, I thought the corporate tax for small business is around 13%. How did you get 28K savings from 55.9K that’s 50%?
Hi John, great question. I used 50%, pretty much highest marginal tax rate in the personal tax system.
If you own your vehicles inside your corporation and do no use it primarily for business purpose, significant standby charge could be imposed on your personal tax return. Yes, you might pay 12.2% in the corporation, but you would then also have to pay for the availability of a company vehicle in your personal tax return.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Your video is very informative
Can u explain the 50000 will only apply on purchase or lease as well
Also if you buy under your name and can claim under your. Business account
th-cam.com/video/89bHePnHJ48/w-d-xo.html - this will answer some of your questions.
Hypothetical question. If your business income is, let's say, $5000/year and you are a sole proprietor, can you use this tax credit to lower your fulltime job taxable income?
Hi Aamer, if you use the vehicle primarily to run your business, hypothetically you can claim the deduction against your business income that would create a loss. The loss can be offset against your full time job income.
However, this may also trigger an audit, depending on how big a loss you are claiming.
In your situation, it's best to speak to someone knowledgeable before making the purchase.
You can also watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Hi
I live in Calgary and I own a small buisness (retail service store ) . I was wondering if buying a Tesla qualify for any incentives or tax credit
This really goes back to how often you drive your vehicle for work (not your store). Mileage driving to your store (or called office) does not count as driving your vehicle for business purpose unfortunately.
You would still be qualified, it just would not give you as much a saving.
This is really wonderful explaination, My Question is I am full time employee at one of big HVAC copany in toronto, but i get paid 100% commission as my salary, and I do have to use my own car to make sales. I dont get any CAR Allownace from my Emyployer. Can i also get this EV tax benefits. say i make avg 100K a year in commissions. is it benefial for me ?
Hi Cherry, really love your video topic! You help lots of Canadian taxpayer! One question, I am a salesperson working in a corporation requries me to visit clients for business generation. My company provides me a T2200 stating my job duties of driving amongst clients and my salary includes a fixed "Car Allowance" payment for few hundreds per month. So if I buy a Tesla in 2022, of coz I cannot get any EV tax benefit from federal nor province since Tesla price over $55k. Could I still get any tax benefits as you said in the video under Class 54 no matter I purchased it in full or under finance? How about interest of the finance? Car expenses, say electric bills, car wash, dashcam purchase and installation, car body protection film.
If T2200 is provided by your employer, you can write off the business use of your new Tesla against your employment income as well. Interest expense on financing is also tax deductible. Car expenses, such as charge expense, car wash, dash cam purchases, etc. are also considered maintenance expense. The business use portion of them can also be written off provided that you are using your vehicle for the purpose of earning employment income.
You will need strong documentation.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
For a self employment person who sells online course, car travel is very minimum.can i still buy tesla? Lets say i travel very less for business
You can still buy whatever car you prefer, you might just not be able to deduct much of it.
Question ! I’m getting the model 3 range plus for under 55000 thousand dollars . I’m eligible In Bc for 8000$ off Ev incentives , if I received the incentive can I still claim the write off for my business use of the car ?
Thank you in advance for responding ! Love your Chanel
If you get incentive, you will not be eligible to qualify for the extra write off.
You can still qualify for $30K write off though.
It sounds too good to be true that you purchased a model 3 range plus for under $55K. For the write off $55K to work, the car has to be brand new.
Hi Cherry does it make a difference which month in the year we buy the Tesla? My wife has been a self employed realtor for many years and have claimed 90% business use of her car. If she buys the tesla in Nov will she still be able to claim the 90% (she will not claim the older car to avoid double counting) Or is she limited to claim a lower amount because there is only 2 months of driving left in the year? thank you
Hi David, feels like I already answered this question before but I guess I never did.
Doesn't make any difference which month you purchase your vehicle. You get the same amount of deduction - assuming that your wife is a sole proprietor. Corporation may be different with first year of incorporation.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Three questions...
1. Consider a scenario where I have two jobs. Job one I am self employed or independent contractor status and job two I am paid a salary by my employer. Can I combine the two incomes at the end of the year and write the car off against that combined income or does it only get applied against job one's income (the self employed income).
2. Does the vehicle (assume a Tesla) does it have to be brand new or can I purchase a used Tesla and claim the one time write off? Note that in this scenario the maximum deduction limit may be the exact same value as I paid for the car, as its used and would be less expensive than in your example.
3. If after you claim the one time tax credit in year one (as in your example), then in year two, you sell the car for the same price you paid for it, could this trigger a recapture in the second year's taxes?
Thanks is advance.
Hi, Thanks for reaching out!
For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
It seems limited for you have an own business income, right?
This may also be applicable if you are also required to use your vehicle for employment purpose. You might be eligible to claim a portion of the car.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Hi Cherry great video. Just one question
Does is matter which month of a year you buy the tesla car. Lets say if I purchase in November 2023 . Can i still deduct 100 %($55000) CCA for 2023?
. Thanks Cherry
Doesn't matter whether it is December or January - you still get the same deduction - assuming you have been in operation beyond the first fiscal year.
Hi there. In a previous video you mentioned that the tax deduction from an EV (e.g., Tesla) is a one-time deductible. Did I misunderstand? For example: I should claim 100% of the total purchase price (multiplied by % business use), instead of claiming 50% this year and 50% next year?
It allows you to claim a one year deduction, but you can also choose to carryforward the undeducted balance to future years. From second year onward, you can claim 30% on the undeducted amount on a declining basis.
hello this spetaular does it apply in Toronto? im moving soon to study and work and im trying to make a buisness model with the robotaxi plan of tesla, this really is helpfull but I WOULD love to see a more detailed explanation for how taxes work and where an I see this laws?
sorry the c key on my keyboard is faulty..
I know very little about robotaxi plan. If you are operating a business in Canada, this tax incentive is available to you. :) Good luck and all the best!
@@RealEstateTaxTips is it good that you know very little about it? haha and also thank you very much !! but one more thing where can I see this laws???
@@MrRaysuli it isn't a direct incentive that you get. It is a saving that you get to obtain if you have a business - here's from CRA's website about the extra tax incentive.
www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties/zero-emission-vehicles.html
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Great video, I ordered Tesla model Y. went on the CRA site and as of November 23rd Tesla is not on the list anymore. And because it's more than 45,000 I don't have any credits from purchase or tax write-offs now. Anything else I can do that you know of ?
Hi Richard, Thanks for reaching out! Every individual's situation is unique.
For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca
hi richard, how can i contact you. i am in the same boat.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Thanks for the updated video notice, definitely answered all my questions. Always appreciate you putting out amazing content and very useful tips for us!
This would not apply to a regular employee who commutes to and from their office right? :(
This can only apply if you are required to use your car to travel for employment purpose. Some of my clients are required to use their own vehicles for employment purpose and they can deduct a portion of the car. If you routinely commute to and from your office, it is highly unlikely this applies.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
@@RealEstateTaxTips Thanks !
Will this work for my wife’s sole proprietorship if she’s listed as a co-registrant on our upcoming Mode 3? Reason for this is a) to have financing under my name and b) if we take delivery right before she gets her license later this year. We’ll be writing off about 50% for business use. Thank you!!!
Answer from CRA: Yes, it works.
@@kyleltg just to clarify though, the $28K savings mentioned is based on personal taxes.
If you are owning a vehicle in your corporation and does not use it primarily for business purpose, it can trigger some adverse tax impact.
Be sure to consult with your accountant. If you aren't working with someone, feel free to reach out to our office.
All the best.
@@RealEstateTaxTips We don't have a corporation. Rather, she'll be using ~50% of the car for her sole-proprietorship and therefor we'll write off ~50% off the car. CRA said this was OK. The Tesla dealership actually said we needed to be incorporated, which was misinformation on their end. Thank you for sharing! :)
@@kyleltg definitely misinformation - but I always bring my skepticism with me when I'm not talking to professionals when they are giving out advice that is not within their trades.
GREAT VIDEO
Thanks!
Thanks for this video! If the price of a used Tesla is over $61,000, are you able to claim $61,000 deduction from taxable income in addition to ITC in HST on top of that?
ITC claimed depends on the ownership structure as well as the business use % of the vehicle.
Hi dear , I have one question , my Tesla is coming on 22 of this month , I got rebate as per British Columbia rules , as I’m financing how I can write off ?
Thanks
Since you are getting the rebate, you would not be able to qualify for $55K Class 54 write off, but you will still be qualified for $30K Class 10.1
Financing or purchase with cash would not make any difference in this case.
Hey Love the video I have a question I am self-employed and I have a small landscaping business and I was looking in to the Tesla model Y for 95% business use so I am able to get around and secure more contracts and clients. Would I be eligible for the Deduction
If you use your vehicle for self employed business, and you use it for 95% of the time and have proper documentation to support it, you should be eligible for the deduction. Make sure you consult with a professional accountant that knows your situation better.
And again, you're welcome to reach out to our office if you need help.
Where did u get the 28K?
Does it make sense to use this strategy if the net profit from the rental property is under $50k?
Hi Ron, it goes to how much you use your vehicle to manage your rental properties. The higher the %, the more the deduction. It isn't about the amount of net rental income you are receiving. It is the business use of the vehicle that matters.
@@RealEstateTaxTips thanks for the clarification! I guess this will work and people will get the refund as you said. The only issue I can think of is if the rental income is low, the high vehicle expense will lead to rental loss on the CRA tax slip and the CRA may not like that.
@@ron3420 absolutely. :) Be sure to consult an accountant before buying a low emission EV.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Are all these numbers (like the $13,000 or $28,000) just deductions to income?
So way oversimplified, but if my income is $100,000 and I bought a Tesla and it was 50% used for my business, how much would be taken off my taxes in the first year? Or how much less would I have to pay in taxes roughly.
Taxes saved would entirely depend upon the taxable income that the deduction is being claimed against. I would recommend you schedule a consultation with my team to help you determine your potential savings.
Hey,
I saw that this incentive was only available untill Jan 1 - 2024. - is there a follow up version?
According to the Government of Canada web site there is up to $5,000 available at the point of sale.
@@RealEstateTaxTips thanks for the update i appreciate you, liked & subscribed!
Hello Cherry, if the year I bought the Tesla is the year that I didnt make much profit, is the $55,000 Tax Credit Carry over for the next year?
Thanks & more power
Yes, you can decide how much CCA you claim and any unclaimed CCA can be taken the following year
Do you need to buy the electric vehicle under your company name to take advantage of this tax savings?
Also, what would be the advantage of purchasing the vehicle under your company name vs personal name?
You can take advantage of this deduction whether you own the car in your personal name or in the corporation.
Mind you though, the corporation owned vehicle might pose significant tax issues on your personal name if you do not use the car for business use all the time. It is way more complicated when you own the vehicles are owned in the corporation's name.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Awesome video, very interesting. I was concidering getting a Tesla model 3 for my business, it would be 100% business use. The car purchase price is 54 290$, I would be financing it. My business sells for 1.5 Million and profits around 150k a year. What kind of savings Im I looking at here on the Tesla? I also live in Quebec which also gives another 8,000$ for EV vehicle.
Thank you so much.
Be mindful of any government subsidies that you are getting. If you get them, chances are you wouldn't be eligible to qualify for the extra tax saving.
It might still be worthwhile to get the $8K instead of bigger tax saving, depends on your situation.
Make sure you consult with a professional accountant that understands this area of tax.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Can I do this if I bought a second-hand tesla?
The 2021 budget did announce the plan to allow taxpayers to purchase used EV, but this still hasn't been passed to law yet. So, as of now, the answer is no.
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Do you have to purchase the vehicles out-right or can you finance it and still be eligible for the $55K tax write-off? Thanks!
You don't need to purchase the vehicle out right. You can finance it as well.
Thank you for your prompt reply and Wishing you a very Happy New year!
Do watch my latest video, where I address some commonly asked follow-up questions 😊th-cam.com/video/89bHePnHJ48/w-d-xo.html
Hi Cherry, I am thinking for taking advantage of this. I am real estate investor who has a rental condo that is 20km from me and an Airbnb that is 106 km each way and I visit the Airbnb at least once a week and do not want to add KM to my personal as I use that for my daily Commute . Can I take advantage of this
Hi Sunil, it is really difficult to tell whether it is beneficial to you or not, just from this message. Make sure you consult with an accountant who knows about how to apply this strategy before you make your purchase. Good luck.
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Assuming these benefits do not apply to salaried professionals, in any form or manner?
If your employer requires you to use your automobile for employment purpose (normally they would issue a form called T2200 to specify the type of employment expenses that they require you to incur for the purpose of performing your duty as an employee), you can obtain similar type of benefits, based on the employment use of your automobile.
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Thank you for your knowledge of tax regulation. I read the CRA website and understand that I need to claim CCA under class 54 for my car. But it said we could claim max $55k for 2019 only. Do you know how much threshold for 2022?
$55K is the max you can claim when you purchase a new car without claiming any government subsidies.
Same amount in 2022 if you purchase your vehicle in 2022.
@@RealEstateTaxTips Many thanks for your information. I posted another question here but it looks like being removed, so I tried to post again, I have 2 questions and hopefully you could answer:
1- Is this Zero-Emission Vehicles only applied to electric engine only like Tesla? Can plug-in Vehicles as listed on this below website like Toyota RAV4 Prime, Mitsubishi Outlander PHEV also be qualified ?
tc.canada.ca/en/road-transportation/innovative-technologies/zero-emission-vehicles/list-eligible-vehicles-under-izev-program
2- As defined under class 54: There is a limit of $55,000 (plus federal and provincial sales taxes), it means I could claim up to $55,000 + HST = $62,150. Am I correct?
With all the best.
@@miken9382 hi mike, I don't follow cars so I can't really say which type of plug in EV qualifies. My recommendation is that you check in with your accountant to specify your question.
Having said that, my understanding generally is that plug in hybrid would apply to class 54.
With respect to your second questions, it really goes back to the province you are in, and how you use your vehicle as well. Again, it is a specific question to your own accountant. :) Depending on the type of business you're in, there're different ways to claim your HST as well.
Good luck.
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Are you referring to iZEV program?
No. iZEV provides rebates - whether you own a business and use your vehicle for business or not. You would still qualify for the rebates.
As for the tax write off, you MUST use your vehicle for business to qualify for the write off.
@@RealEstateTaxTips ok sounds fantastic!
Sorry to reply to your answer with another question but would a rental property 1000 kilometers away from my primary residence be an amendment to my primary business of merchandise sales? Eg. home repairs
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How do you prove that 90% use for business? Do they check?
Hi Lis, you will have to keep a log book on your vehicle. When CRA performs an audit, they ask for your logbook as well as the vehicle maintenance record as a corroborative evidence.
Hope it helps.
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Hi can I do this if I financed the Tesla?
I purchased in December 2021 and use it for 90% business.
Can I do the frost tax write off for 2021 or would it need to be for 2022?
Thanks
The write off is available in the year of purchase, assuming you are using it for business use.
You can find more detail explanation in the latest video - th-cam.com/video/89bHePnHJ48/w-d-xo.html
Great video! could you please explain when you say deduction of $9,153 what does it means? I do not pay tax on $9,153?My taxable income will get reduced by $9,153?
Yep. you get a tax deduction of $9153 in the first year if you decide to claim the write off the traditional way.
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I think this is incorrect. Class 10.1 (vehicles > $30k) can only claim 15% CCA in first year (half-year rule). Also it seems for the 100% HEV class (max $55k), I believe you are NOT allowed to take any federal incentives, for instance the $5k iZEV credit. I could be wrong but it seems to be written that way.
Class 10.1 has a maximum amount you can claim $30K + HST.
Currently there's no half year rule so first year it is still 30%. This will be lifted in the future. As I mentioned a few times, you cannot receive any government rebate (in the case of Tesla, I don't think it qualifies anyway) at purchase to qualify for the bigger deduction. Hope this helps.
@@RealEstateTaxTips ok thanks for clarifying
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Hi Cherry great video. If I buy the car in cash electric or non electric let's say for 50,0000. Can I deduct this as an expense for that particular year ?
You can deduct the business use portion of the vehicle assuming you are using it to drive around for business purpose.
If you are using it for employment purpose, then it depends on whether you need it for employment or not.
@@RealEstateTaxTips thanks Cherry I am employed however work on 100 percent commission .
@@JAGDEEPsingh-vi3xi as long as you have a T2200 issued by your employer specify that you need to use your vehicle and have a proper supporting document to substantiate your claim... you should be able to claim the employment use of your vehicle
@@RealEstateTaxTips thanks Cherry .
Is there any tax write off for ev in year 2 as well?
If you take the maximum write off in year 1, then unfortunately there is nothing left in year 2.
If you didn't take the maximum write off in year 1, chances are, you will be able to write off the remaining balance in the following years.
@@RealEstateTaxTips Hi, are you base in Toronto?
@@davidlam6959 Hi David, yes, we are in Oakville.
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Could you please provide some more details about $28,000 tax savings. For Ontario ev inc is $5000 and for 50% tax bracket it will be $14,000. Is there any additional deductions available?
Not sure if you had watched the whole video, but at the time this video was made, Class 54 - which is what the EV would be claimed on your business tax return, has a maximum deduction of $5,000 plus HST.
Our example assume 90% business use. So $55K + HST x 90% = $55,935 write off available.
Assuming tax rate of 50% - $56K x 50% = $28K tax savings.
Also want to mention that you CANNOT claim any government rebate on EV to qualify for the big write off. Hope it helps.
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Is this 28,000 a carry forward? For example.is the 28k write off in year 1 of the corporation to bring the net income to zero or can we carry forward the losses to year 2?
$28K represents the potential tax saving. You can deduct the expense in year 1 and carry forward the loss or you can opt to deduct the expense over a couple of years as well so that you can carry forward the deduction to year 2.
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@@RealEstateTaxTips I already did :)
How does this work if the vehicle is financed or leased?
th-cam.com/video/89bHePnHJ48/w-d-xo.html
This video has all the answers
Thank you for for information
I was asking that I am an Uber driver and I want to buy an ev car for doing Uber. I was wondering if I am eligible for this program. I will appreciate for the answer.
Thank you
Ahmad
Yes you can, provided that you have a proper logbook. Only the % that you drive to earn Uber would be tax deductible.
how did you calculate the 28 k savings?
55,000 x 1.13 x 90% business use x 50% tax rate
My wife is an incorporated realtor and pays out a salary (T4 income). Can she buy the Tesla personally and then claim the CCA on form T777 as employment expense? or will this cause an issue as she is not dealing at arms length with the corporation? thank you
Claiming it as T777 employment expense is a common way used by many of our clients. Make sure you speak with your accountant to get a better understanding of what is required for documentation purpose.
@@RealEstateTaxTips thanks Cherry. Does this special deduction apply for buying a used or second hand Tesla? The wording on the govt sites seem to indicate no as they say that the car cannot be used for any other purpose prior to you buying it.
@@dwu02 It is in the federal budget two years ago to allow used vehicle but covid hit and it never came into effect. It was also in the current year federal budget but again, because of election, the legislation still has not come into effect.
At this point I am not sure when and if used e-car would be acceptable.
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Hello Ms Chen, inorder to write-off the Tesla 100% does that mean one has to pay for the car off 100% at the time of purchase or can the business finance the car? (Lets say I made a down-payment of $20,000 and finance $30,000) how do I write this off?
The write off is based on the purchase price of your car. You can borrow to purchase the car, you can pay it off all at once. The key is that you have to purchase the vehicle and use it for business purpose to qualified for the write off.
Hope this helps.
@@RealEstateTaxTips You are a wealth of knowledge!
It seems like the structure is 1. Buy in our personal names 2. Use it for business and claim it. Is that right?
If we receive the tax benefit in year 1, would it make sense (possibly) to then sell the car in year 2 since we've already maxed out the tax deduction benefit?
@@ianpoulin haha, unfortunately if you sell it immediately for a higher price, there's something called recapture tax.
Nice try, but can't do it.
If you purchase your vehicle in your personal name, and use it to run your business in your corporation, just make sure you are paying yourself enough from your corporation and have the appropriate form issued to allow for the deduction.
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Can I also deduct fuel expenses for business use ( fuel used to travel to and back from work)?
Hi Anuj,
If you are travelling to your office, you cannot claim the mileage you commute to your office generally speaking. Unless you're required to work from home and your employer issues a T2200 for you to confirm that you are required to use your vehicle for employment purpose.
@@RealEstateTaxTips thnks.
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would having your business vehicle wrapped with your business name and website count as advertising 100% of the time? which means the vehicle is used for business 100% of the time? So that even if you drive sometimes for personal it wouldn't matter because your vehicle is advertising for your business.
Thoughts?
Business use % is based on the actual log book, not based on the wrap around the vehicle.
@@RealEstateTaxTips i understand but wouldn’t the fact that it’s an advertisement Everytime I drive around could I not write off a monthly reasonable amount for advertising cost plus the cost of the wrap?
Hi Cherry, i will have my tesla arrive in 2 months time. Im planning to lease it, is the write off for this still capped at 800$/month as stated on cra site or is there different benefit for EV cars?
Write off is still the same amount... :(
Lucky you, mine got postponed for a few months.
@@RealEstateTaxTips haha well, the website shows june/july delivery, so I assume there isn't a delay yet. When would they update you if there is a delay? Would you think financing the vehicle is better for write off purposes? I personally just didn't want to keep the vehicle after 4 years because I don't know how the battery health would do in that time in the future. (It's like your phone battery dies after around 2-3 years of using it)
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Great video! If you're using the electric vehicle for business, can you obtain the federal rebate (living in Ontario so no provincial rebate at the time) and still also qualify for the tax rebate?
Hi Alex, my understanding is that you cannot obtain any government rebate to qualify for the deduction.
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Hello, I am married and filing joint every year. we have a double house (2 units together). we lived in one unit and rent out one unit and claim tax every year as a rental property. we sold the house for $435,000 for both the units. they give us a 1099-S and report as one $435,000. how do I report on my tax? what tax form do I use form 4797 or form 8949 or other form to calculate the capital gain on the one unit rental property that I sold? how do I report on the form to excluded the main home (one unit that i lived in)? the form 1099-S issued only one price.
Hi Tony, we're a Canadian tax channel. It sounds like you're from the States. I would definitely consult a US CPA. :) Sorry couldn't help you.
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so im an owner operator and uses my vehicle strictly for business. and i use it 100% just for the business. how would i write this off?
Hi there!
As every case in unique, I'd advise to you to sit down with a professional to help you with all your real estate tax concerns. You can come in or phone consult with me and my team. For any personalized consultation, we advise that you book an appointment.
Feel free to contact us at 416-548-4228 or email us at admin@cccpa.ca.
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Hi Cherry,
If you're a real estate investor as sole proprietor and have a full time job, would you still be able to get tax deductions?
The deduction is restricted to the amount of business use (rental use in your case). If you drive often to manage your properties in relation to your personal use (including employment use), it is likely you get a bigger deduction (and bigger tax savings)
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Does this apply to corporations?
Calculation is different so tax saving would be different as well. But same tax deduction is available.
You forgot the hst refund. So that's another 25k if you buy it in a business that has hst collected.
Great comment. HST claim is based on the type of business your operated, your business use of vehicle - you can find out more about the HST claim on the vehicle via this blog post I did a few years back realestatetaxtips.ca/how-to-maximize-hst-claim-when-purchasing-a-new-vehicle/
It isn't a 100% benefit unfortunately, goes back to exactly the % of commercial use vs. % of personal use and even if it is 100% commercial use, there's a cap on the amount of HST you can claim.
I invested in pre construction condo and have it under my personal name. Once it closes can I claim the deduction under my name? Do I qualify as a landlord?
You can claim the deduction if you are using the condo as an investment property earning rental income.
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What about leasing a Tesla? If I would put $55,000 downpayment would that be a complete write off? And I can still claim $800 a month write off on the lease payment
Leasing a Telsa would not require you to put $55K down. Sorry I am confused about what you are trying to ask. Feel free to call us for a consult at 416-548-4228 or email us at admin@cccpa.ca
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Just so we are clear its 28k in tax deductibles(assume 50% tax bracket so 14k saved) right? You don't actually save 28k right?
If you own a business and you are using your e-vehicle to run your business, you are eligible to claim the extra deduction available for e-car.
@@RealEstateTaxTips This only applies for Model 3 right? As the other models are not listed on the "List of eligible vehicles under the iZEV Program" page
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hello, i have a rental property that brings in about 3500$x 12=4200$ yr also i drive uber full time which brings in an additional 50000$ totalling about 100000 yr. i pay about 2000$ in income tax last year. with this would i be getting a tax refund check. if so i plan to pay against the financing amount of the tesla model y. thank you. and would my accountant understand the info you've provided in the video.
Hi there,
Thanks for reaching out! I'm glad you find them helpful. I'm not sure what is the understanding your accountant will have. But, if you have any questions or need a consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca
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Is this applicable if you purchase a used tesla? Or in general. if you buy a used car for business, can you do a tax write off?
Used cars including EVs can be deductible in general, but only governed by the same rules as the regular cars (non-ev). So deduction amount is based on actual amount paid, and maximum deduction would be $30K plus HST even if you buy a used Tesla that's way over $30K.
@@RealEstateTaxTips so the 100% first year write off is only applicable to the new vehicles that are in the list of eligible vehicles ? For example: Tesla is not in the list anymore, which means tesla will now fall under regular cars category($30K + HST)
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HI Cherry, can one continue to write off into the years following the first year of deducting 100% accelerated CCA? For eg. if the first year deduction was 55000*100%(100% business use) * 50% (tax bracket). Can you also continue to write off the monthly payments and interest after writing of the CAA?
You're allowed to write off the interest payment on an ongoing basis.
With respect to the vehicle purchase, you can only have maximum write off of $55,000.
If you don't claim $55K (assuming 100% business use), you can carried the undepreciated amount to future years to claim.
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@@RealEstateTaxTips Can these interest expenses write-off reduce the Lifetime Capital Gain Exemption limit?
Awesome vid! As a first time business owner this year in BC, I find this pretty interesting. Does this apply in BC as well? and how does the write off work? Claimed in tax season? Very new to all this so sorry if these have been explained already! Thanks so much!
Well, this write off is only available if you do NOT take any government incentive.
You will also need to use your vehicle to run your business to maximize any tax write off as well.
Be sure to speak to your accountant, and if you don't have one, we're always here to help. Feel free to reach out to our office.
Where to buy used Tesla in Canada?
Great Question - Facebook marketplace? Car dealership. Tesla themselves also has used vehicle available.
How often will I be eligible for this annual write off? Can I purchase a Tesla every few years and be eligible?
When you sell your Tesla, it may trigger some amount of recapture. Also, the program is starting to end from 2024 onwards.
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I am a 100% commissioned sales rep who uses my vehicle for work
Can I use this tax write off?
If you are 100% commission employee and receive a T4 from your employer, you will have to obtain T2200 from your employer indicating that you are required to use your vehicle for work...in order for you to be eligible to claim the automobile expenses.
You can watch the newest video explaining it as well. th-cam.com/video/89bHePnHJ48/w-d-xo.html
How about if you bought a Tesla for around $90,000, and then sold it after 5 months?
If that’s the case how much of business use would you have? Is it worthwhile claiming anything to begin with?
Also make sure you watch this video th-cam.com/video/89bHePnHJ48/w-d-xo.html and it may provide you some insights
@@RealEstateTaxTips Assuming that it is 100% business owned by a corporation. Bought directly from Tesla for 90K+TAX
Is this only limited to businesses? Or do self-employed(Uber) qualifies for this program as well?
Also, does it have to be a 1 time write off or you're allowed to spread it over 2-3 years?
Driving Uber is a self-employed business. Depending on the business usage of your vehicle for Uber driving purpose, you can take advantage of this program to a certain extent.
@@RealEstateTaxTips A follow up question. I see that you could also deduct stuff like insurance cost, fuel cost and etc. So, is the actual deductible amount something like the 30k + hst + others costs? Or you can only pick one out of the two?
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Does not mention the large taxable benefit that would be owed for years on a corporate owned Tesla
Hi Mee28, thanks for your comment. The $28K saved is purely calculated on the personal tax highest marginal tax rate in Ontario. The video isn't created to calculate and illustrate how corporate owned Tesla would have a huge impact on personal tax. And at the end of the day, the amount of taxable benefits are also calculated based on the business use % of the vehicle within the corporation, if taxpayer choose to own this vehicle inside his/her corporation.
@@RealEstateTaxTips Thanks for the quick reply. To clarify, the Tesla Model 3 I purchased in June 2019 under my personal name and used for business purposes, can claim this $28K benefit with my T2022 from my employer. 90% of this vehicle is used for business purposes.
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This also expires in 2024? No?
Class 54 is available for eligible vehicles acquired after March 18, 2019 and before January 1, 2028. It is gradually being phased out starting in 2024. :) You will still have it available (maybe on a reduced amount) until 2028.
100.00000 $
Yes, Tesla can be easily over $100K, depending on the model you ordered.
Can't help but wonder if I'd want to buy a car that I can save $28,000 on, when I'd much ratherr buy a car that costs less than $28,000 !
I love that comment! Car purchase is such a personal choice. My husband and I bought our Honda Odyssey off the lease as well for practical reason.