Are website costs depreciated or amortized?

Are website costs depreciated or amortized?In Canada, website development costs are typically capitalized as intangible assets and amortized over their useful life (usually 3–5 years), not depreciated. Depreciation applies to tangible property, while amortization covers intangible assets like software and websites under CRA rules.AnswerWebsite costs are amortized, not depreciated. The CRA treats websites as intangible capital property similar to software, which means you capitalize the development costs and write them off over their useful economic life through amortization.Most businesses amortize website costs over 3 to 5 years. A brochure site with minimal updates might justify a 5-year schedule, while an e-commerce platform that needs redesigns every 3 years should use a shorter timeline. The key is matching the amortization period to how long you'll actually use the asset before major replacement or overhaul.What gets capitalized versus expensed immediately matters for your books. Design, development, content creation, and custom functionality all get capitalized. Monthly hosting, domain renewals, minor content updates, and ongoing SEO work get expensed in the year incurred. If you pay $15,000 for a website build, that's capitalized and amortized. If you pay $150/month for hosting, that's a direct expense.The depreciation versus amortization distinction comes down to tangible versus intangible. Depreciation covers physical assets like office furniture or vehicles. Amortization covers non-physical assets like patents, trademarks, goodwill, and yes, websites. Both accomplish the same goal—spreading a capital cost over multiple years—but accounting standards and tax law use different terms for different asset classes.For Ottawa SEO's clients running portfolio sites, we typically see 3-year amortization schedules because competitive industries demand refreshes every few years. A site built in 2022 that's still driving leads in 2027 is rare unless you're in an extremely stable niche. Your accountant will want documentation of the initial build cost separate from ongoing maintenance, so keep invoices organized by capital versus operating expenses.One caveat: if your total website cost is under $500 to $1,000, many accountants will just expense it immediately rather than set up an amortization schedule. The administrative burden isn't worth it for small amounts. Once you're spending $5,000 or more, capitalization and amortization become standard practice.