Depreciation

Explore how depreciation works in Canadian real estate, how it affects insurance, investment taxes, and how it’s calculated for assets and property value.

Depreciation

May 22, 2025


What is Depreciation?

Depreciation is the reduction in the value of a property or asset over time due to wear and tear, aging, or market conditions.

Why Depreciation Matters in Real Estate

In Canadian real estate, depreciation plays an important role in property valuation, insurance claims, investment accounting, and taxation.


Depreciation affects:
  • Actual Cash Value (ACV) of insurance claims
  • Capital cost allowance for rental properties
  • Resale value and maintenance planning


For investment properties, the Canada Revenue Agency (CRA) allows owners to claim depreciation (called capital cost allowance) as a tax deduction, although it may affect capital gains tax on sale.


Understanding depreciation helps owners plan maintenance, assess insurance claims, and track asset value over time.

Example of Depreciation in Action

An older furnace is worth less today than when it was installed. Depreciation is deducted from its value in an insurance claim after a fire.

Key Takeaways

  • Reflects wear and aging over time.
  • Lowers insurance payouts under ACV.
  • Impacts taxes for investment properties.
  • Important for asset and claim evaluations.
  • Can affect resale value.

Related Terms

  • Actual Cash Value
  • Capital Cost Allowance
  • Replacement Cost
  • Home Insurance
  • Property Value

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

More For You

Buy Now, Pay Later Down Payment Lands In Downtown Hamilton

Buy Now, Pay Later Down Payment Lands In Downtown Hamilton

The Rebecca Residence (rendering)

As sales continue to stagnate and homeownership remains unattainable for many in the GTHA, one housing developer is offering a unique new way for aspiring homeowners to get into the market.

The Rebecca Residences in downtown Hamilton is an upcoming 23-storey condo building from Ontario developer Rosehaven Homes. It’s currently offering a range of preconstruction units starting in the $300,000s, but interested buyers are not required to shell out a hefty downpayment. At least not outright.

Keep ReadingShow less

Ontario Agriculture Is “In Crisis”, And It’s Giving Way To A New Age For Farmland

Ontario Agriculture Is “In Crisis”, And It’s Giving Way To A New Age For Farmland
Cambium Farms in Caledon/Photography by Nathan Cyprys

When the Williamses hosted a family wedding at their Cambium Farms property in 2011, they weren’t thinking about adaptive reuse or rural tourism, but the event ended up being pivotal, setting in motion a years-long transformation that would expand the farm’s use well beyond agriculture.

“Facebook had come around, so pictures of the wedding were online, and people were asking to rent the space out. We thought, maybe this is a business opportunity,” says Colin Williams, who has been Cambium Farms’ President since 2013.

Keep ReadingShow less

GTA Home Sales Rose, New Listings Shrunk In April: TRREB

GTA Home Sales Rose, New Listings Shrunk In April: TRREB

The GTA housing market logged a mixed April, with home sales rising 7% year-over-year as new listings pulled back — a combination that suggests tighter conditions are beginning to take hold this spring.

Average prices dipped again, but early signs of month-over-month stabilization may give fence-sitters something to think about.

Keep ReadingShow less

Cressey Advances Burquitlam Condo Tower And Rental Build After 2024, 2025 Fires

Cressey Advances Burquitlam Condo Tower And Rental Build After 2024, 2025 Fires

The proposal for 727 North Road in Coquitlam. (Chris Dikeakos Architects, Cressey Development)

On Monday, Coquitlam City Council granted approval to a high-rise project in the Burquitlam neighbourhood by Cressey Development Group, advancing a project that has been in the works for at least three years and was impacted by a fire.

The site of the project is 727 North Road, a 0.94-acre site between Como Lake Avenue and Clarke Road on the eastern side of the the City of Burnaby boundary. The site is immediately north of the two-tower Smith & Farrow project by Boffo, and about a block away from the Millennium Line SkyTrain’s Burquitlam Station, making it a Tier 1 transit-oriented area (TOA) under provincial legislation.

Keep ReadingShow less

Stafford And Deveraux Group To Bring 159 Rentals To The Annex

Stafford And Deveraux Group To Bring 159 Rentals To The Annex

Image via Stafford

Stafford and Deveraux Group of Companies have announced a strategic development partnership — and their first joint project is already underway.

The pair announced Thursday that they're co-developing a 12-storey, 159-unit purpose-built rental building at 914 Bathurst Street in The Annex.

Keep ReadingShow less
MUST READ: Stafford And Deveraux Group To Bring 159 Rentals To The Annex

StreetSide Proposing 35-Storey Condo Tower, 6-Storey Rental In Burquitlam

StreetSide Proposing 35-Storey Condo Tower, 6-Storey Rental In Burquitlam

The 400-unit project is set for 602, 606, 610 Tyndall Street and 605, 611, 615 Claremont Street in Coquitlam and consists of 339 strata units and 61 rental units.

On Monday, Coquitlam City Council advanced a new rezoning application by StreetSide Developments, a subsidiary of Qualico, for a new high-rise tower in the Burquitlam neighbourhood of Coquitlam.

The site of the project is 602, 606, 610 Tyndall Street and 605, 611, 615 Claremont Street: A 1.1-acre land assembly consisting of three single-family lots on Claremont Street and three single-family lots on Tyndall Street, on the northern side of Como Lake Avenue near the intersection with Clarke Road.

Keep ReadingShow less

Bank Of Canada Holds Rate At 2.25% As Housing Activity Stays Muted

Bank Of Canada Holds Rate At 2.25% As Housing Activity Stays Muted
Bank of Canada

The Bank of Canada held its overnight rate at 2.25% on April 29, keeping borrowing costs steady as the country navigates a turbulent global backdrop shaped by the conflict in the Middle East and ongoing US trade policy uncertainty.

For Canadian real estate, the decision offers little relief in the near term. The Bank's April outlook paints a cautious picture for housing: activity declined in the fourth quarter of 2025 and remains constrained by slow population growth, economic uncertainty, and affordability challenges that have yet to meaningfully ease. GDP growth is projected at a modest 1.2% for 2026, rising gradually to 1.6% in 2027 and 1.7% in 2028 — a trajectory that suggests any meaningful recovery in housing demand is still some distance away.

Keep ReadingShow less

Dramatic Danforth Village Modern Is Not Like The Others

Dramatic Danforth Village Modern Is Not Like The Others

Sotheby's International Realty Canada

Virginia Avenue is a quiet residential street in Danforth Village — the kind of block where many homes have been standing for decades.

Coming up in 2022, 83 Virginia Avenue made no attempt to blend in.

Keep ReadingShow less
Privacy PolicyAbout UsTerms of UseAdvertise with UsJobsContact UsRSS Feed
All rights reserved SiteMedia © 2026.