Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3)

new purpose-built residential rental

new purpose-built residential rental means a purpose-built residential rental that

• (a) was

  • (i) built for use as a purpose-built residential rental if construction began after April 15, 2024 and before 2031, or

  • (ii) previously a building, or part of a building, used as a commercial property that was substantially renovated for use as a purpose-built residential rental if the renovations began after April 15, 2024 and before 2031, and

• (b) becomes available for use before 2036; (nouvel ensemble résidentiel construit spécialement pour la location)

purpose-built residential rental

purpose-built residential rental means a building or a part of a building situated in Canada

• (a) that contains

  • (i) four or more residential rental units at least four of which contain private kitchen facilities, a private bath and a private living area, or

  • (ii) 10 or more residential rental units, and

• (b) in which all or substantially all the residential rental units are rented or offered for rent for continuous periods of not less than 28 consecutive days; (ensemble résidentiel construit spécialement pour la location)

residential rental unit

residential rental unit means a housing unit used or intended for use as a rented residential premises that is not provided to the travelling or vacationing public; (logement locatif)

• (a) is acquired by the taxpayer after November 20, 2018 and before 2025 and becomes available for use before 2028; and

• Marginal note:Definition of reaccelerated investment incentive property

  (4.01) For the purposes of this Part and Schedules II to VI, reaccelerated investment incentive property means property of a taxpayer (other than property included in any of Classes 54 to 56) that

  • (a) is acquired by the taxpayer after 2024 and becomes available for use before 2034; and

  • (b) meets either of the following conditions:

    • (i) the property is not a property in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act by any person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or

    • (ii) the property was not

      • (A) acquired in circumstances where

        • (I) the taxpayer was deemed to have been allowed or deducted an amount under paragraph 20(1)(a) of the Act in respect of the property in computing income for previous taxation years, or

        • (II) the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

      • (B) previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership.

• Marginal note:Deemed separate properties

  (4.11) For the purpose of subparagraph (4.01)(b)(i), if the capital cost to a taxpayer of a depreciable property (referred to in this subsection as the “single property”) includes amounts incurred at different times, then amounts deducted under paragraph 20(1)(a) or subsection 20(16) of the Act in respect of the single property are deemed to have been deducted in respect of a separate property that is not part of the single property to the extent the deducted amounts can reasonably be considered to be in respect of amounts

  • (a) incurred before 2025; or

  • (b) incurred after 2024, if any portion of the single property is considered to have become available for use before the time the single property is first used for the purpose of earning income.

transmission equipment

transmission equipment means equipment used to transmit electrical energy. (matériel de transmission)

eligible electrical generation equipment

eligible electrical generation equipment means property that is electrical generating equipment described in

• (a) subparagraph (d)(iii.1), (v), (vi), (vii), (xiv) or (xix) of Class 43.1 in Schedule II; or

• (b) subparagraph (e)(i) or (iii) of the definition clean electricity property in subsection 127.491(1) of the Act. (matériel générateur d’électricité admissible)

eligible transmission equipment

eligible transmission equipment means property (other than a building) that is transmission equipment of a taxpayer where

• (a) the transmission equipment is used in connection with eligible electrical generation equipment of the taxpayer; and

• (b) on annual basis

  • (i) more than 75% of the electrical energy generated by the eligible electrical generation equipment is transmitted by the transmission equipment, and

  • (ii) more than 75% of the electrical energy transmitted by the transmission equipment is generated by the eligible electrical generation equipment. (matériel de transmission admissible)

• (b) the property utilizes heat obtained from the taxpayer’s system;

Environmental Compliance

• (17) A property that would otherwise be eligible for inclusion in Class 43.1 or Class 43.2 in Schedule II by a taxpayer is deemed not to be eligible for inclusion in either of those classes if, at the time the property becomes available for use, there is substantial non-compliance by the taxpayer with the requirements of any environmental law, by-law or regulation of Canada, a province, a municipality, or a municipal or public body performing a function of government in Canada that is applicable in respect of the property.