The CRA, in filing your income taxes, allows for a deduction for moving expenses in some cases. You can claim a deduction eligible moving expenses on line 219 of your tax return forms. Not all moving expenses are deductible. To avoid a negative audit outcome, make sure you know what you can and cannot deduct.
Moving expenses are only deductible if you either (1) moved to establish a new home to work or to run a business at a new location, or (2) you moved to be a full-time student of a post-secondary program at an educational institution. In both cases, you have to move at least 40 Km closer to your new place of work or school. The distance is not measured using the shortest route, but according to the most efficient route in a particular year (for example a longer route to avoid congestion or construction is the most efficient route).All other moves are considered personal, and none of the expenses are deductible.
Once you have an eligible move, you have to see what moving expenses you can deduct. These eligible moving expenses include (but are not limited to):
- Travel expenses such as meals, accommodation, and vehicle costs to move your and the members of your household;
- Temporary living expenses, such as meals and temporary accommodation, near the old or new place for you and your family members (no more than 15 days);
- Transportation and storage expenses for household goods, including packing, movers, in-transit storage, and insurance;
- Other incidental expenses, such as replacing driving licenses and other documents, utility installation and disconnections, legal costs directly related to the move, changing your address, and so on.
Other expenses may also be eligible. If you cannot use any of the moving expenses in the year you move, you can carry forward the expenses and deduct them in a future year.
However, there are some expenses that you cannot deduct. These non-deductible expenses as moving expenses include:
- Expenses of any work done on your old home to make it ready for sale or your new home to make it ready to live;
- Losses from the sale of your old home;
- Travel expenses for house-hunting trips to the new location before you move;
- Expenses to clean or repair a rental unit to meet the landlord’s standards;
- The cost of mortgage default insurance;
- Expenses to replace personal items you didn’t move with you;
- Cost of installing household items in a new home;
- The increased cost of the new home when compared to the old home;
- The cost of things you could not move with you or the movers refused to take; or
- Cost of mail forwarding services.
This is just a partial list of allowable and non-allowable moving expenses that you are eligible to deduct.
The general rule is that you can deduct the ordinary out-of-pocket costs you actually incur to physically change your residence. The costs have to be related to the actual move and resettlement in the new residence. More guidance can be found on the CRA Form T1-M, or by contacting your tax professional.