What it covers
The CRA describes personal-use property as items you own primarily for the personal use or enjoyment of your family and yourself. That includes personal and household items such as furniture, automobiles, boats, a cottage and similar property. Whether a gain on a home or cottage is taxable depends on the principal residence exemption, which is covered separately.
Many people never have to think about these rules, because most personal items sell for less than they cost, and a loss on them is not deductible. A gain is possible when something increases in value, and then it is reportable.
The $1,000 rule
To keep small sales out of the system, the rules treat an adjusted cost base below $1,000 as $1,000, and proceeds below $1,000 as $1,000. If both the cost and the proceeds are $1,000 or less, there is no capital gain or loss and you do not report the sale on Schedule 3.
As an illustration, suppose you bought a canoe for $600 and sell it for $1,500. The cost is treated as $1,000, so the gain is $500, before any selling costs. If you had sold it for $800, the proceeds would be treated as $1,000, and the result would be nil. The numbers are illustrative only.
Losses and exceptions
If you sell personal-use property for a loss, you usually cannot deduct it, and you cannot use it to reduce gains on other personal-use property. The reasoning is that a decline in value through personal use is a personal expense.
The restriction has exceptions. It does not apply to listed personal property, which has its own loss rules, or to certain bad debts owed to you from selling personal-use property to someone you deal with at arm’s length. Property you use to earn income, such as a rental unit, is not personal-use property at all.
What to discuss with your accountant
Keep the purchase price, receipts for major improvements and the sale documents for larger items such as a cottage, a boat or a vehicle you did not use for business. A change in how you use a property, for example renting out a vehicle you used personally, can be treated as a sale, so mention it before it happens.
Ask whether an item is personal-use or listed personal property, whether a cottage can be designated as a principal residence for some years, and whether a gain needs reporting. The broader category is explained under capital property.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Completing Schedule 3Canada Revenue Agency
- Definitions for capital gains and lossesCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.