Moving Expense Deduction in Canada

If you moved to a new home to work, run a business, or attend post-secondary school, you may be able to deduct your moving expenses on your Canadian tax return. The deduction can be substantial, covering everything from transportation to temporary housing.

Eligibility Requirements

To qualify, your move must bring you at least 40 kilometres closer to your new work or school location. The distance is measured by the shortest normal route, not a straight line.

You must also be moving to earn income from employment or self-employment at the new location, or to attend a post-secondary institution as a full-time student.

Eligible Expenses

The CRA allows a wide range of moving costs, including:

• Transportation and storage for household effects
• Travel expenses to move you and your family (vehicle, meals, accommodation)
• Temporary living expenses near the old or new residence (up to 15 days, including meals and lodging)
• Lease cancellation costs at your old residence
• Legal fees and land transfer taxes related to purchasing a new home (if you sold your old home)
• Cost of selling the old home — real estate commissions, legal fees, advertising
• Utility connection and disconnection fees
• Cost of revising legal documents to reflect your new address (driver’s licence, vehicle permits)

Simplified Method for Meals and Vehicle

Instead of tracking every receipt, you can use the CRA’s simplified method:

• Meals: Claim a flat rate per person per meal (check the CRA’s current rates for your tax year)
• Vehicle: Claim a per-kilometre rate based on your province of origin

The simplified method requires no receipts, but you must keep a record of the distance driven and the number of meals claimed.

What You Cannot Deduct

Some costs related to a move are not eligible:

• Expenses for work done to make your old home more sellable (staging, renovations)
• Losses on the sale of your home
• Mortgage penalties or interest differentials
• Mail forwarding costs
• Costs of house-hunting trips before the move

How Much Can You Deduct

Moving expenses can only be deducted against income earned at the new location. If your eligible expenses exceed your income at the new location, you can carry forward the unused portion to the next year.

Students can deduct moving expenses against scholarships, fellowships, bursaries, research grants, and employment income earned at the new location.

Filing the Claim

Report your moving expenses on Form T1-M, Moving Expenses Deduction. The deduction is entered on line 21900 of your return. Keep all receipts and records for at least six years in case the CRA requests documentation.

Common Scenarios

Relocating for a new job: You move from Calgary to Toronto for work. The new home is 3,400 km closer to your new office. You can deduct transportation, travel, temporary housing, and costs of selling your Calgary home.

Starting university: You move from a small town to attend university in another city, 200 km away. You can deduct moving costs against scholarship and employment income earned in the new city.

Returning home after temporary work: If you move back to your original location after a temporary job, you may qualify for the deduction again, as long as the 40 km requirement is met.

Sources

• CRA — Moving expenses
• CRA — Form T1-M