Moving Expenses

Eligibility for Deducting Moving Expenses:

• Employees: Those who move to work at a new location (including for the same employer) can deduct moving expenses.

• Self-Employed Persons: Individuals who move to start a business at a new location are eligible.

• Students: Full-time students moving for post-secondary education may also qualify.

Conditions for Deduction:

• Distance Requirement: The new residence must be at least 40 kilometers closer to the new work or educational institution, measured via the shortest public travel route.

• Net Earnings Limit: Deductions are limited to net earnings at the new location. Unused eligible expenses can be carried forward and claimed in subsequent years but must be reported in the year incurred.

• Purpose of Move: The move must primarily be for employment purposes, though a job need not be secured before moving. Claims may be denied if employment is not the principal purpose or if there's a significant delay in securing employment post-move.

Additional Rules:

• Timing: There's no strict time limit for the move following employment at a new location, but a longer delay might weaken the claim’s validity.

• Future Expenses: Expenses incurred after the move year can be claimed in the year they are paid.

• Multiple Moves: For individuals with multiple eligible moves in a year, deductions are limited to net income earned at each new location.

• Spousal Moves: Expenses can be split between spouses or common-law partners moving for new jobs or businesses.

• Employer Reimbursement: If employers cover moving expenses, employees can only deduct expenses exceeding the employer-paid amount.

• Supporting Documentation: Essential for validation, including letters from employers confirming employment details, expenses covered, and reimbursements provided.

• Expenses Outside Canada: Typically, expenses must be incurred within Canada. Exceptions apply for Canadian residents living abroad, allowing claims as if the move occurred within Canada.

Note:

Deduction claims should align with the CRA’s policy and administrative guidelines to avoid denial or adjustments during assessment. For specific cases and circumstances not covered, it might be advisable to consult a tax professional or refer to the CRA's detailed guidelines and policies on moving expenses.

Which Moving Expenses Are Deductible and Which Are Not?

Tax-deductible moving expenses are costs you can deduct from your taxes when moving, as per the Income Tax Act. These include:

✅ Packing and moving household items: The expenses of packing, moving, storing (temporarily), and insuring your belongings during the move.

✅ Travel costs for you and your family: Money spent on traveling, meals, and accommodation during the move.

✅ 15-day living expenses: The cost of temporary lodging and meals for up to 15 days near your old or new home.

✅ Lease cancellation fees: The cost to cancel your old residence's lease (but not the rent paid while living there).

✅ Address change costs: Expenses related to changing your address on legal documents, replacing vehicle permits, licenses, and connecting/disconnecting utilities.

✅ Old home upkeep costs (up to $5,000): The cost of interest, property taxes, insurance, and utilities to maintain your former home after moving (up to $5,000), as long as no one was living there, and you tried to sell it.

✅ Old home selling costs: Expenses like real estate commissions, advertising, legal fees, and mortgage penalties related to selling your old home.

✅ New home purchase costs: Legal fees and taxes paid when buying and registering your new home, but only if you sold your old home due to the move. Note: This doesn't apply to first-time homebuyers or GST/HST on new homes.

Remember, you must meet the Income Tax Act's specific criteria to claim these deductions.

Below are expenses you CAN NOT deduct from your taxes when moving:

❌ Job or house-hunting trips: Costs from trips made before the move to look for jobs or homes.

❌ Home improvement costs: Money spent making your old home more sellable.

❌ Cleaning and repair costs for rented homes: Costs to clean or fix a rented home to meet your landlord's standards.

❌ Value of unmovable items: The worth of things movers won’t take, like plants, frozen food, paint, ammunition, and cleaning supplies.

❌ Replacement costs for lost or damaged items: Money spent replacing items that were lost or damaged during the move.

❌ Mortgage default insurance: Insurance that protects the lender if you default on your mortgage.

❌ Mail-forwarding costs: Fees paid to Canada Post to forward your mail to your new address.

❌ New home financing costs: Costs related to getting financing for your new home.

❌ Losses from selling your old home: Any financial loss experienced when selling your old residence.

These costs are not deductible as moving expenses on your taxes.