What Qualifies for Class 12
- Tools costing under $500 each (at $500 or more, they're Class 8)
- Kitchen utensils and cutlery under $500 — restaurants live in this class
- Medical and dental instruments under $500
- Computer application software — accounting, design, and industry software bought outright
- Linens, uniforms, and costumes
- Dies, jigs, patterns, and moulds
- Rental videocassettes and certain films (a reminder of the class's age)
The 100% rate makes classification pure upside: anything you can legitimately place here is deductible now instead of over a decade. The $500 threshold has been fixed since May 2006, so inflation pushes more tools over the line every year — a serious cordless tool set clears it easily.
The Half-Year Wrinkle
Class 12 is 100%, but not always all at once. The class splits in two:
- Exempt from the half-year rule: tools, utensils, and medical instruments under $500, plus linens and uniforms. These have always been full write-offs in year one.
- Normally subject to it: application software, dies, jigs, and moulds. Historically these claimed 50% in year one and 50% in year two.
"Historically" is the operative word. The Reaccelerated Investment Incentive suspends the half-year rule for property acquired from 2025 through 2033 — so a $10,000 software licence bought in 2026 is a $10,000 deduction in 2026. The same purchase in 2018 would have been $5,000 and $5,000. When the incentives lapse after 2033, the two-year split returns for the software side of the class.
Class 12 Gotchas
- The threshold is per item, not per purchase. A $3,000 order of fifteen $200 hand tools is entirely Class 12. One $3,000 lathe is Class 8.
- SaaS isn't Class 12. Subscription software is an operating expense deducted as you pay it — no CCA involved. Class 12 covers software you buy and own.
- 100% doesn't mean "skip the register." A fully depreciated tool is still a business asset — for insurance, for theft claims, and for proceeds that trigger income when you sell it. Track it even after it hits zero.
Class 12 Questions
Check the other classes
The plain-language CCA guide covers the whole system — pools, the half-year rule, recapture, and the 2026 incentives.
Rules verified against CRA guidance and Bill C-15 as of July 22, 2026. Class 12 has more item-specific conditions than this page lists — confirm classifications with your accountant or the CRA's class list.