Canada Revenue Agency
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Type of vehicle
The kind of vehicle you own can affect the expenses you deduct.
For income tax purposes, there are two types of vehicles:
If you own or lease a passenger vehicle, there can be a limit on the amounts you can deduct for capital cost allowance (CCA), interest, and leasing costs.
Motor vehicle - this is an automotive vehicle designed or adapted for use on highways and streets. A motor vehicle does not include a trolley bus or a vehicle designed or adapted to be operated only on rails.
Passenger vehicle - this is a motor vehicle designed or adapted primarily to carry people on highways and streets. It seats a driver and no more than eight passengers. Most cars, station wagons, vans, and some pick up trucks are passenger vehicles. They are subject to the limits for CCA, interest, and leasing.
A passenger vehicle does not include:
- an ambulance;
- clearly marked police and fire emergency-response vehicles;
- a motor vehicle you bought to use more than 50% as a taxi, a bus used in the business of transporting passengers, or a hearse in a funeral business;
- a motor vehicle you bought to sell, rent, or lease in a motor vehicle sales, rental, or leasing business;
- a motor vehicle (except a hearse) you bought to use in a funeral business to transport passengers;
- a van, pick-up truck, or similar vehicle that seats no more than the driver and two passengers which, in the tax year you bought or leased, was used more than 50% to transport goods and equipment to earn income;
- a van, pick-up truck, or similar vehicle that, in the tax year you bought or leased, was used 90% or more to transport goods, equipment, or passengers to earn income;
- a pick-up truck that, in the tax year you bought or leased, was used more than 50% to transport goods, equipment, or passengers while earning or producing income at a remote work location or at a special work site that is at least 30 kilometres from the nearest community having a population of at least 40,000 persons; and
- a clearly marked Emergency Medical Service vehicle used to carry paramedics and their emergency medical equipment.
To help you determine what type of vehicle you have, see the following chart. The chart does not cover every situation, but it gives some of the main definitions.
The chart is for a vehicle you buy or lease after June 17, 1987, and use to earn business income.
| Type of vehicle | Seating (includes driver) | Business use in year bought or leased | Vehicle definition |
|---|---|---|---|
| Coupe, sedan, station wagon, sports car, or luxury car | 1 to 9 | 1% to 100% | passenger |
| Pick-up truck used to transport goods or equipment | 1 to 3 | more than 50% | motor |
| *Pick-up truck (other than above) | 1 to 3 | 1% to 100% | passenger |
| Pick-up truck with extended cab used to transport goods, equipment, or passengers | 4 to 9 | 90% or more | motor |
| *Pick-up truck with extended cab (other than above) | 4 to 9 | 1% to 100% | passenger |
| Sport utility used to transport goods, equipment, or passengers | 4 to 9 | 90% or more | motor |
| Sport utility (other than above) | 4 to 9 | 1% to 100% | passenger |
| Van or minivan used to transport goods or equipment | 1 to 3 | more than 50% | motor |
| Van or minivan (other than above) | 1 to 3 | 1% to 100% | passenger |
| Van or minivan used to transport goods, equipment, or passengers | 4 to 9 | 90% or more | motor |
| Van or minivan (other than above) | 4 to 9 | 1% to 100% | passenger |
| *A vehicle in this category that is used more than 50% to transport goods, equipment, or passengers while earning or producing income at a remote work location or at a special work site that is at least 30 kilometres from the nearest community having a population of 40,000 persons is considered a motor vehicle. | |||
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