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Capital Expenditures

Learn about capital expenditures (CapEx) in Canadian real estate — what they are, how they’re planned, and why they matter for asset management.

Capital Expenditures

June 27, 2025


What are Capital Expenditures?

Capital expenditures (CapEx) refer to major expenses incurred to acquire, upgrade, or extend the life of a property or its major systems, beyond routine maintenance.

Why Capital Expenditures Matter in Real Estate

In Canadian real estate, CapEx impacts budgeting, reserve funds, tax planning, and asset valuation for both residential and commercial properties.



Examples of capital expenditures include:
  • Roof replacement
  • Elevator modernization
  • Building envelope repairs
  • Major HVAC system upgrades



CapEx is typically planned for in condo reserve funds or landlord capital budgets, and may affect rent increases, special assessments, or investor returns.



Understanding CapEx is key to long-term property management and investment planning.

Example of Capital Expenditures in Action

The condo board allocated reserve funds for a capital expenditure project to replace aging windows throughout the building.

Key Takeaways

  • Major property upgrades or replacements
  • Distinct from routine maintenance
  • Planned in reserve funds or capital budgets
  • Impacts value, rent, and assessments
  • Important for tax and investment planning

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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