Taxes and Moving (Canada)

  • Moving is stressful enough without even considering the financial costs. The government does however provide tax relief for some move situations. It would be nice if every move were tax deductible but there only two primary types that qualify: moving for the sake of employment or to moving to attend university. Of course we’re talking taxes, so the details are complicated and numerous, but the interpretations are endless too, so we always recommend talking to a tax professional. Here’s the basics:

    • If you are moving at least 40km toward your new employment/school OR to enable employment with the same employer. The first one is clean cut: you move to a new place for a new job. But the latter, enabling employment, continues to play out in the courts. These are people who moved more than 40km toward their current job. Think promotions or moving downtown because you were told you’d be fired if you showed up late one more time. 40km is measured as the easiest publically available route - not as the crow flies.

    • Only moves within Canada qualify. But there are some exceptions for students.

    • Take note - Your location for tax purposes is registered on Dec 31 of a given year. So you can save money if you’re moving to a province with lower taxes, by trying to get there sooner (before the end of the calendar year). And if you’re moving to province with higher taxes, by pushing the move into the new year.

    • You may only deduct the expenses from income earned from the new location (not EI or investment income), with a rollover to one following year. You are not allowed to deduct more expenses than income.

    • Qualifying expenses - includes the transportation of you and your stuff (moving boxes and other supplies), meals and lodging, costs of selling your old home, utility connection/ and disconnection charges, address change, and more.

    Thanks to Tim Cestnik at The Globe and Mail and for the info. Check out their articles and speak to a tax professional for complete advice.

    Here’s to happy moving!

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