Undepreciated Capital Cost (UCC) is based on the assessed building value at the time of purchase less any Capital Cost Allowance (CCA) which has already been claimed. For this we use a simple formula
- (Building cost - CCA) = UCC
Example of UCC:
If you purchased a property for $300,000 with a building value of $250,000 and over a period of 10 years claimed $50,000 in CCA, the final UCC would be $200,000.
If you were depreciating a Class 1 building at 4% every year, the amount of UCC would never actually reach zero as CCA does not use straight depreciation, rather it is a fixed rate based on the UCC.