Moving is expensive: the average Canadian residential move costs $1,500 to $3,000 for a local move and $5,000 to $12,000+ for a long-distance move. What many Canadians don't know is that a significant portion of those costs can be deducted from income when the move is connected to work or school. The CRA's moving expense deduction allows workers, students, and new graduates to claim a wide range of relocation costs, but only when specific eligibility conditions are met. This guide covers who qualifies, what expenses are eligible, and how to file the claim properly.
Moving Expense Deduction. Eligibility in One Rule
New home must be ≥40km closer to new work/school location (by shortest public route)
The 40km test compares: (a) the distance from your new home to the new work/school location vs (b) the distance from your old home to the new work/school location. If (b) − (a) ≥ 40km, you meet the primary eligibility criterion.
Eligibility: Who Can Claim Moving Expenses?
You can claim moving expenses if you moved to:
- A new job or work location (employee or self-employed)
- Start a new business at a different location
- Study full-time at a university, college, or other post-secondary institution (student deduction)
And: your new home must be at least 40km closer to the new work/school location than your old home was (measured by the shortest normal public route, not straight-line distance).
Eligible Moving Expenses: What You Can Deduct
| Expense Category | Eligible for Deduction? | Notes / Limits |
|---|---|---|
| Professional moving company | Yes ✅ | Full cost including packing, loading, transport |
| Renting a moving truck | Yes ✅ | Truck rental + gas for the move trip |
| Temporary accommodation (up to 15 days) | Yes ✅ | Hotel/motel near old or new home while transitioning |
| Travel costs — gas, flights, meals | Yes ✅ (with limits) | Reasonable costs for one trip of yourself and family to new home; meal deduction is limited to flat rate ($23 breakfast, $12 lunch, $28 dinner per adult) |
| Selling old home costs | Yes ✅ | Real estate commissions, legal fees, notary costs, mortgage penalty for breaking mortgage (if applicable) |
| Buying new home costs | Yes ✅ (if old home was owned) | Legal fees and land transfer taxes (only if you owned the old home and are buying the new one) |
| Lease cancellation fees | Yes ✅ | If renting and breaking a lease early to move |
| Storage costs | Yes ✅ (up to 30 days) | Storage of household goods during the move period |
| Renovating old home to sell | No ❌ | Renovation/repair costs not eligible |
| Duplicate housing costs (if old home not sold yet) | Partially ✅ | CRA allows these in some cases — check CRA T4044 |
| Driver's license/vehicle registration | No ❌ | Administrative costs of changing jurisdiction not eligible |
⚠️ Source: CRA — T4044 Employment Expenses and Form T1-M. Keep all receipts: the CRA may request documentation to verify moving expense claims.
Deduction Limit: Income Earned at New Location
Moving expenses can only be claimed against income earned at your new location: you cannot claim them against income from your old job, investment income, or other income sources. If your eligible moving expenses exceed your income at the new location in the year of the move, you can carry the excess forward and claim it against new-location income in the following year.
| Moving Expenses | Income at New Location | Deductible in Year 1 | Carry Forward to Year 2 | Tax Savings (30% marginal rate) |
|---|---|---|---|---|
| $8,000 | $50,000 | $8,000 | $0 | ~$2,400 |
| $15,000 | $10,000 (mid-year job start) | $10,000 | $5,000 | ~$3,000 (year 1); ~$1,500 (year 2) |
| $6,500 | $65,000 | $6,500 | $0 | ~$1,950 |
Frequently Asked Questions
Can I claim moving expenses on my Canadian tax return?
Yes: if you moved to a new job location, new self-employment location, or full-time post-secondary education, and your new home is at least 40km closer to that location than your old home was. Eligible expenses include moving company costs, temporary accommodation, travel, storage, selling your old home, and buying your new one. Use Form T1-M to calculate and report the deduction on line 21900 of your T1.
What is the 40km rule for moving expense deductions in Canada?
Your new home must be at least 40km closer to your new work or school location than your old home was: measured by the shortest normal public route (not straight-line distance). Example: if your old home was 45km from your new job and your new home is 5km from it, the distance reduced by 40km: exactly meeting the threshold. The CRA measures "shortest public route" using normal roads and transportation routes, not highways or direct routes that might not represent typical travel.
Can a student claim moving expenses in Canada?
Yes: full-time students at post-secondary institutions who move to attend school can claim moving expenses. The deduction is limited to income earned at the new location (including taxable scholarships, fellowships, and bursaries). Students often carry forward their moving expense deduction to the following year when they have more income (e.g., during summer employment near school). Part-time students do not qualify.
What receipts do I need for Canadian moving expense claims?
Keep all receipts for eligible expenses: moving company invoices, truck rental receipts, hotel bills, gas receipts for the move trip, meal receipts (limited to CRA flat rates), real estate lawyer/notary fees, real estate commission statements, and lease cancellation confirmation. The CRA may request supporting documentation if the claim is reviewed. While you don't submit receipts with your return, you must be able to provide them within 3 years of the original filing if audited.
Can I deduct the cost of selling my home as a moving expense?
Yes: real estate agent commissions, legal/notary fees for selling your old home, mortgage prepayment penalties if you had to break your mortgage to sell, and advertising costs for selling your home are all eligible moving expenses under CRA guidelines (line 21900). These are often the largest component of total moving expense claims for homeowners. Legal fees for purchasing the new home are also eligible if you owned (not rented) the old home.
Final Thoughts
The moving expense deduction is one of the most underutilized employment-related deductions in Canada: primarily because people don't realize they qualify, or don't bother with the paperwork. At a 30–40% marginal rate, a $10,000 deductible move saves $3,000–$4,000 in tax: money that more than justifies the administrative effort of completing Form T1-M and keeping receipts. Use the Canada Income Tax Calculator to model how a moving expense deduction affects your total tax owing, and explore our Work From Home Tax Credit guide if you also work remotely at your new location and want to claim home office expenses.
Sources & Citations: Content verified against official guidelines from the IRS (US), HMRC (UK), and ATO (AU). Information is reviewed for accuracy prior to publication.
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