Are Moving Expenses Tax Deductible in Canada?

Moving to a new city or province for a job or school is a significant life event. One benefit that many Canadians overlook is that the Canada Revenue Agency allows you to deduct certain moving expenses on your tax return. This can put some meaningful money back in your pocket.

This guide explains who qualifies, what costs are deductible, and how to claim moving expenses on your Canadian tax return.

Can You Deduct Moving Expenses in Canada?

Yes. Moving expenses are deductible under Section 62 of the Income Tax Act. However, specific conditions must be met to qualify.

Who Qualifies to Claim Moving Expenses?

You may be eligible to claim moving expenses if you moved to:

• Start a new job with a new employer
• Start a business at a new location
• Attend a post-secondary school full-time as a student

The 40-Kilometre Rule

The key eligibility requirement is the 40-kilometre rule. Your new home must be at least 40 kilometres closer to your new workplace or school than your old home was. This is measured as the shortest normal route, not a straight line on a map.

For example, if you previously lived 50 km from your new employer and moved to a new home only 5 km away, the move qualifies.

What Moving Expenses Can You Claim?

The CRA allows deductions for a range of moving-related costs, including:

• Travel costs — Vehicle expenses, meals, and accommodation while travelling to your new home
• Moving and storage — Cost of hiring movers, renting a truck, or temporary storage
• Temporary living costs — Up to 15 days of meals and accommodation near your old or new home
• Cost of selling your old home — Real estate commissions, legal fees, and mortgage penalties
• Cost of purchasing your new home — Legal fees and land transfer taxes (if your old home was sold due to the move)
• Changing your address — Cost of updating driver’s licence, vehicle registration, and utilities
• Lease cancellation costs — Penalties paid for cancelling your old lease

What Moving Expenses Cannot Be Claimed?

• Home renovations or repairs to help sell your old home
• Costs of house hunting trips before the move
• Mail forwarding fees
• Expenses reimbursed by your employer
• Losses from selling your home below market value

How Moving Expense Deductions Are Applied

Moving expenses can only be deducted against income earned at the new location. This means:

• Employees can deduct expenses against their employment income at the new job
• Self-employed individuals can deduct against business income earned at the new location
• Students can deduct against scholarships, bursaries, or research grants received

If your eligible moving expenses exceed the income earned at your new location in the year of the move, you can carry the unused portion forward and deduct it in the following year.

How to Claim Moving Expenses on Your Tax Return

1. Complete Form T1-M — Moving Expenses Deduction
2. Enter the total eligible deduction on line 21900 of your T1 General return
3. Keep all receipts, invoices, and supporting documents in case the CRA requests them

You do not need to submit receipts with your return, but you must keep them for at least six years.

Moving Expenses for Students

Full-time students who move at least 40 kilometres closer to a qualifying post-secondary institution can also claim eligible moving expenses. These costs are deducted against any taxable scholarships, fellowships, bursaries, or research grants received.

Table of Summary

Here is the blog information in 6 easy rows for quick understanding:

Section	Easy Information
1. Topic	The blog explains whether moving expenses are tax deductible in Canada and how to claim them.
2. Eligibility	You can claim if you moved for a new job, business, or full-time studies, and meet the 40-km rule (new home at least 40 km closer to work/school).
3. Eligible Expenses	Travel costs, movers, storage, temporary accommodation (15 days), real estate fees, legal fees, lease cancellation, and home purchase/sale costs.
4. Non-Eligible Expenses	House hunting trips, renovations, mail forwarding, reimbursed expenses, and losses from selling property below market value.
5. How It Works	Deduction applies only against income earned at the new location (employment, business, or student income). Unused amounts can be carried forward.
6. How to Claim	File using Form T1-M, report on line 21900 of T1 return, and keep receipts for 6 years (do not submit unless requested).

Frequently Asked Questions

Can I claim moving expenses if my employer reimbursed me?

No. You can only claim expenses that were not reimbursed by your employer. If you received partial reimbursement, you may be able to claim the unreimbursed portion.

Do I need to provide receipts when claiming moving expenses?

You do not attach receipts to your tax return, but you must keep them on file for at least six years. The CRA may request them during a review.

Can I deduct moving expenses if I moved within the same city?

Generally no. The 40-kilometre rule must be met. Moving within the same city typically does not qualify unless your new home is at least 40 km closer to your workplace than your old home was.

What if my new job fell through after I moved?

Moving expenses can only be deducted against income earned at the new location. If you did not earn income there, you may not be able to claim the deduction that year, but you can carry it forward to future years.

This is general information only and not professional advice. Consult a professional before acting.