Does claiming CCA affect my principal residence

Yes, claiming capital cost allowance (CCA) on a building can affect your principal residence exemption (PRE), so it is a decision to make with your accountant. This is tooling, not tax advice.

What the warning means

When you open the claim panel on the Tax page and a pool is a building (Class 1), Wealtharu shows a calm disclosure on that pool. It is a heads-up, not a block. You can still claim if you and your accountant decide to.

Two things happen when you claim CCA on a building:

• Principal residence exemption. Claiming CCA on a property generally disqualifies the principal residence exemption for the period you claim it. If the property ever was, or later becomes, your home, claiming CCA can defeat the elections that would have sheltered the gain.
• Recapture on a sale. The CCA you claim lowers the building's undepreciated capital cost. When you sell, the depreciation you took can be recaptured into income on the T776 (line 9947). A property that never claimed CCA recaptures nothing.

Why we still let you claim it

CCA is your choice. Some landlords claim it to reduce rental income today, accepting the recapture later. Others skip it on a building precisely to keep the principal residence exemption open. Both are valid, and the right call depends on your plans for the property.

Wealtharu defaults every pool to claiming $0 and never claims CCA on a building for you. You opt in deliberately, per building, per year.

What to do

• If the property is or might become your home, talk to your accountant before you claim CCA on the building.
• Appliances and furniture (Class 8) and vehicles (Class 10) do not carry the principal residence concern, so the warning only appears on a building.
• This feature is part of the CCA engine, which is preview while the rates and rules are reviewed by counsel. It is tooling, not tax advice.

Related

• "How much CCA can I claim" for the yearly limit and the rental-loss cap.
• "Bring in your CCA opening balances" for setting up a pool you were already depreciating.