Moving Expenses Tax Deduction: When and How to Claim
If you moved to start a new job, run a business, or attend school full-time in Canada, you may be able to deduct your moving expenses. This is one of the most overlooked deductions because many Canadians don’t realize they qualify.
Who Qualifies?
You can claim moving expenses if:
- You moved at least 40 km closer to your new work, business, or school location (measured by the shortest public route)
- You moved within Canada, or into Canada from abroad (in some cases)
- You are deducting against income earned at the new location
What You Can Claim
- Transportation and travel costs (gas, flights, meals during travel)
- Moving company fees or truck rental
- Temporary living expenses (up to 15 days near either the old or new home: meals and accommodation)
- Costs of cancelling a lease at your old place
- Utility connection/disconnection fees
- Costs of selling your old home (real estate commissions, legal fees, transfer taxes)
- Costs of maintaining an empty old home (up to $5,000: mortgage interest, property tax, insurance, utilities)
- Cost of changing address on legal documents (driver’s license, vehicle permits)
What You Can’t Claim
- Costs of buying your new home are generally not deductible, except for certain legal fees and land transfer tax if you also sold your old home due to the move
- Losses on the sale of your old home
- Moving expenses for a vacation property
- Job search costs before moving
How to Claim
Report moving expenses on Form T1-M (Moving Expenses Deduction). Deduct against employment, self-employment, or scholarship income earned at the new location.
If your moving expenses exceed your income at the new location for that year, carry the unused portion forward to the next year.
The 40 km Rule
The 40 km is measured by the shortest public driving route, not straight-line distance. CRA uses Google Maps or similar tools to verify. Many moves that seem “close” still qualify once you measure the driving distance properly.
Students: You Qualify Too
If you moved to attend a full-time post-secondary program, you can deduct moving expenses against scholarship, bursary, or fellowship income. This is commonly missed by students who move to another city for university.
Tips
- Keep every receipt. Meals can use the simplified flat-rate method ($23/meal), but other expenses need receipts.
- Measure the distance. Use Google Maps to confirm you meet the 40 km threshold.
- Don’t forget the sell costs. Real estate commissions alone can be $15,000+ and are fully deductible as a moving expense.
- Students: claim against scholarship income. Even small amounts help.
Not sure if your move qualifies? Book a free consultation with FinGems.