Claiming
of Moving Expenses
If you move, you may be able to deduct the moving expenses.
You can deduct the moving expenses provided you move
for the following purposes:
1) To
take up a new job or new place of employment.
2) To
start a new business.
3) To
study on a full time basis at a post-secondary institution.
Moving expenses are deductible only if you move more
than 40 kms.
Some of the expenses that qualify for moving expenses
deductions are as follows:
1) Reasonable
travelling costs including the cost of the meal and lodging for you and your
family members. You can claim the meal cost at flat rate of $17 per meal, three
times a day times the number of days involved in moving or at actuals whichever
benefit you.
2) The
cost of moving your household effects, including storage charges.
3) The
cost of the meals and lodging near either the old or the new home up to 15
days.
4) Lease
cancellation costs.
5) The
cost of revising the legal documents to reflect the new address, replacing the
driver’s licenses and automobile permits.
6) Charges
for utilities connects and disconnects.
7) Selling
costs of your old home including real estate commission.
8) If
you sell your old home, legal fees and land transfer tax payable when you buy a
new home.
9) Mortgage
interest, property taxes, insurance premium, insurance premium and utility
costs related to your old home up to a maximum of $5,000.
10) In
case of travel by automobile for moving, the cost of moving is at actual or at
a predetermined rate of Canada Revenue Agency ( CRA) ranging from 43.5 Cents to
59 Cents per km. depending on the Province or Territory in which you begin
travelling.
In case if the moving expenses are reimbursed by your
employer, you may be taxed on the reimbursement provided by your employer.
However, your employer can reimburse you for the following purposes without
creating a taxable benefit.
1) The
cost of the house hunting trips to the new location.
2) Travelling
costs for you and your family members while you and your family members are
moving from old home to the new one.
3) The
cost of the transporting or storing your household effects and the other
personal property while moving from old home to the new one.
4) The
cost of revising the legal documents to reflect the new address, replacing the
driver licenses, automobile permits, utility connects and disconnects.
5) Mortgage
interest, property taxes, insurance premium and utility costs related to your
old home up to a maximum of $5,000.
6) If
your employer pays you non-accountable moving expenses allowance, it is not
taxable up to $650.
7) Reimbursement
of loss on sale (proceeds minus the cost of the home) of your old home up to
first $15,000 and thereafter at the rate of 50% on the excess amount of loss
reimbursed by your employer.
In addition to above, the
moving expense deduction is limited to the income from the new employment or
business or the amount of grants or bursaries received for full time study.
If the income is insufficient, the balance amount of moving expenses will be
carried forward to the following year and can be deducted against the
income from the same job or business.
When you immigrate to Canada,
you cannot deduct the moving expenses on your first Canadian income tax return
because at the time of move you are not a resident of Canada for tax purposes.
However, if you move out
of Canada, you may be able to deduct the moving cost to other country as you
will be still a Canadian tax resident at the time of moving to other country.
Disclaimer:
Any discussion on this blog relating to tax matters is purely for educational
purposes and not taking any specific actions based the general tax rules
described therein. Your tax situation could be different and as a result there
may be different tax strategies applicable in your case. We do not claim the
tax situations described above to be exhaustive or conclusive. In case of any
specific tax situations or problems, you are advised to seek professional
advice.
