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What kind of moving expenses can be claimed on your taxes?

claim-moving-expenses-on-your-tax

In Canada, certain moving expenses can be claimed on your taxes if you moved for work, to run a business, or to study as a full-time student at a post-secondary level.

What is Moving Expenses?

  • The costs incurred when someone relocates to a new place of employment operates a business, or enroll full-time in a post-secondary educational institution are referred to as moving expenses.
  • The new residence must be at least 40 kilometers closer to the new work or school location than the previous residence in order to be eligible for tax deductions.
  • By deducting these costs from your income, you may be able to lower your overall tax liability.

Eligible Moving Expenses

Transportation & Storage Costs

  • Costs associated with using your vehicle for the move, such as fuel, maintenance, and rental fees if you rent a moving van or truck.
  • Fees are paid to a moving company for packing, transporting, and unpacking your household items and personal effects.
  • Costs for you and your family members to travel to the new residence, including airfare, train tickets, or bus fares if you’re not driving.
  • Costs for renting a storage unit to hold your items until you can move them into your new residence.

Travel Expenses

  • Costs associated with driving your vehicle(s) to the new location, such as fuel, maintenance, and rental fees.
  • Meal expenses for you and your household members during the move.
  • Reasonable costs for temporary lodging for you and your household members during the move.

Temporary Living Expenses

  • Reasonable costs for temporary lodging, such as hotels or motels, for you and members of your household.
  • Costs for meals for you and your household members during the period of temporary living.
  • The CRA typically allows the deduction of temporary living expenses for a period not exceeding 15 days.

Cost of Cancelling your Lease

The cost of cancelling your lease refers to any expenses incurred as a result of terminating a rental agreement before its scheduled end date. 

The move must meet the Canada Revenue Agency’s (CRA) eligibility criteria, primarily because it enables you to be at least 40 kilometers closer to your new work, business location, or educational institution.

Incidental Costs

  • Fees for updating legal documents or IDs to reflect your new address.
  • Costs associated with notifying government agencies, financial institutions, and other entities of your address change.
  • Fees are charged by utility companies for disconnecting services at your old residence and connecting services at your new residence. This can include electricity, gas, water, internet, and telephone services.
  • Fees paid to Canada Post or other service providers for forwarding your mail from your old address to your new address for a specified period.
  • Costs associated with updating your driving license and vehicle registration to reflect your new address, if required by provincial or territorial regulations.

Cost to Maintain your Old Home when Vacant

  • Mortgage interest and property taxes paid during the period the home remains vacant can be claimed.
  • Payments for utilities such as water, electricity, and gas to maintain the home in good condition while it is vacant.
  • Insurance premiums are paid to keep the home insured during the vacancy period.
  • Costs for maintaining the property, including lawn care, snow removal, and minor repairs necessary to keep the home in sellable condition.

Consult with a Tax Professional

Consulting with a tax professional can provide clarity and ensure that you maximize your eligible deductions. By carefully planning your move and keeping detailed records, you can maximize your tax deductions and reduce the financial burden of relocating. It’s advisable to consult with a tax professional or refer to the CRA’s guidelines to ensure compliance and maximize your deductions.

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