Tax Tips

• Tax Tips Archive

Moving Expenses

Subject: Moving Expenses Number: 13-07 Date: 5/31/2013

please consult your TSG representative if you have a 'moving experience' to discuss

We are often asked if expenses to move outside of Canada for work or study are tax deductible.  The answer, in most cases, is "yes", if the person maintains Canadian resident status.

The general rule provides that, among other conditions, a taxpayer can claim moving expenses if he/she moves at least 40 kilometers closer to a new business or employment location in Canada. Hidden deeper within the legislation were provisions that seemed to allow deductions if a taxpayer moved outside of Canada but was still a Canadian resident:  Paragraph 19 of IT 178R3 confirms this conclusion.  A recent proposed amendment to the Income Tax Act makes this conclusion clearer.

Examples of Canadians who leave Canada but still remain tax resident include:

• Members of the Canadian armed forces;  
• Canadian ambassadors to other countries;
• Missionaries;
• Other government employees relocated abroad for work;
• Canadian students attending foreign universities; and
• Persons who leave Canada that are still Canadian tax residents based on Canadian tax rules and any applicable "tax treaties".

The CRA website has a list of eligible moving expenses.  Examples include:

1. Selling costs or the cost of cancelling the lease on your residence;
2. Legal and other costs for purchasing on renting your new residence;
3. Transportation and packing costs;
4. Cost to the taxpayer of storing household effects in the course of moving from the old to the new residence; and
5. Cost to the taxpayer of meals and lodging near the old or new residence for a period not exceeding 15 days.

There are limitations on the amount of expenses you can deduct in various scenarios so please consult your TSG representative if you have a "moving experience" to discuss.

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