In accordance with tradition, July 1 often rhymes with moving in Quebec. If you are about to move for a job, to run a business or for your studies, keep your detailed receipts! Because you may be able to deduct different costs, as long as you meet the criteria set out by the Canada Revenue Agency (CRA).
Conditions for deducting moving expenses
Under what circumstances can we deduct our moving expenses? There are different scenarios that could allow you to deduct certain expenses on your next tax return:
- if you have moved from one place to another in Canada;
- if you moved from outside of Canada to a new place of work in Canada;
- if you moved from Canada to a new place of work outside of Canada;
- if you have moved between two locations outside of Canada.
If you are an employee or a self-employed person and you are in one of these situations, you could claim moving expenses as long as you are at least 40 kilometers from your new place of work or business. You may also be able to claim a deduction for moving expenses if you moved to pursue your education.
Finally, if you have moved outside of Canada, between two locations that are outside of Canada, or if you have moved to settle in Canada, you will be able to claim moving expenses only if you are, in the eyes of the CRA, resident in Canada, before and after your move.
Eligible expenses
If you’ve determined that you’re eligible for the moving expense deduction, there are several expenses you and your family can claim, including:
- travel expenses to your new residence for you and your family, whether you are moving at the same time or not (this includes automobile expenses as well as meals and hotel during the trip);
- transportation and storage costs for your furniture (this includes packing your belongings, movers, insurance for your belongings and temporary storage of your belongings, if applicable);
- the cost of meals and temporary accommodation near your old and new residence, for a maximum of 15 days;
- the cost of terminating the lease of your old residence;
- any incidental costs related to your move, whether legal costs, replacement costs of driver’s licenses and registration certificates, as well as any connection and disconnection costs of public services (water, electricity, heating).
As an owner, if you had to pay maintenance costs for your old residence left vacant following your move, you could deduct a maximum of $ 5,000. These costs include insurance, property taxes, heat, electricity, interest, etc.
You can also deduct costs related to the sale of your old residence such as advertising costs, commission paid to a real estate broker, notary fees, as well as the penalty for paying your mortgage, if applicable.
If you sold your home as a result of this move, you may also be able to deduct certain expenses for the purchase of a new home.
In total, you can take a deduction for moving expenses in the thousands of dollars. It is therefore important to keep all your supporting documents in order to avoid unpleasant surprises.
Fees paid by the employer
Many companies are defraying the relocation costs of their employees and families. If your moving expenses were paid by your employer and they are not included in your income, you will not be able to claim a deduction for moving expenses from the CRA.
If in doubt, it is better to consult one of our tax experts. We will make sure to maximize the tax deductions to which you are entitled.