As of the end of May 2025, there were just under 202,000 properties listed for sale on the Canadian Real Estate Association’s Multiple Listing Service. While each of those properties and each property sale is different, all of them involve a move to a new location – sometimes a move up to a bigger and better property in the same town or city, sometimes a downsizing move, and sometimes a move to a new city or even another province. As well, earlier this year thousands of university and college students made the annual trek from their university or college residences or apartments to move back to the family home for the summer.
Whatever the reason for the move or the distance to the new location, all moves have two things in common – stress and cost. Even where the move is a desired one, moving inevitably means upheaval of one’s life, and the costs involved can run to tens of thousands of dollars, especially where those costs include real estate commissions paid in connection with the sale of the current home. There is not much that the tax system can do to reduce the stress of moving, but the associated costs can be offset somewhat by a tax deduction which may be claimed for many of those costs.
While it’s common to refer to the “moving expense deduction” as though it were available to all taxpayers in all circumstances, the fact is that there is actually no universally available deduction claimable for moving costs. In order to be deductible from income for tax purposes, such moving costs must be incurred in specific (and relatively narrow) circumstances. Our tax system allows taxpayers to claim a deduction only where the move is made to get the taxpayer closer to their new place of work, whether that work is a transfer within the same company, a change in employers, moving to set up a new business, or moving to take a summer job. Specifically, moving expenses can be deducted where the move is made to bring the taxpayer at least 40 kilometres closer to their new place of work. That requirement is satisfied where, for instance, a taxpayer moves from Ottawa to Halifax to take that new job, or where a student returns from university in Vancouver to work at a summer job back home in Calgary. It’s also met where a taxpayer is transferred by their employer to another job in a different location and the taxpayer’s move will bring them at least 40 kilometres (as measured by what the Canada Revenue Agency (CRA) terms “the shortest public route”) closer to the new work location. It’s not met where an individual or family move up (or down) the property ladder by selling and/or purchasing a new home in the same town or city.
As well, it’s not necessary to be a homeowner in order to claim a deduction for moving expenses. The list of moving-related expenses which may be deducted is basically the same for everyone – homeowner or tenant – who meets the 40 kilometre requirement. It’s important to remember, however, that even where the 40 kilometre requirement is met, moving costs can be deducted only from income earned from employment or self-employment (business) – such costs cannot be deducted from other types of income, like investment income or employment insurance benefits.
The general rule is that a taxpayer can claim reasonable amounts that were paid for moving themself, their family members, and household effects. In all cases, the moving expenses can be deducted only from employment or self-employment income earned at the new location. Where the move takes place late in the year and/or moving costs are significant, it’s possible that the amount of income earned at the new location in the year of the move will be less than deductible moving expenses incurred. In such instances, those expenses can be carried over and deducted from income earned at the new location in any future year.
Within that general rule, there are a number of specific inclusions, exclusions, and limitations. The following is a list of expenses which can be claimed by the taxpayer without specific dollar figure restrictions (but always subject to the overriding requirement of “reasonableness”):
- travel expenses, including vehicle expenses and meals and accommodation, to move the taxpayer and members of their household to their new residence (note that not all members of the household have to travel together or at the same time);
- transportation and storage costs (such as packing, hauling, movers, in-transit storage, and insurance) for household effects, including such items as boats and trailers;
- costs for meals and temporary accommodation for up to 15 days for the taxpayer and members of the household, near the old or the new residences;
- lease cancellation charges (but not rent) on the old residence;
- legal or notary fees incurred for the purchase of the new residence, together with any taxes paid for the transfer or registration of title to the new residence (excluding GST or HST);
- the cost of selling the old residence, including advertising, notary or legal fees, real estate commissions, and any mortgage penalties paid when a mortgage is paid off before maturity; and
- the cost of changing an address on legal documents, replacing driving licences and non-commercial vehicle permits (not including insurance), and costs related to utility hook-ups and disconnections.
A few years ago properties often sold almost as soon as they were put on the market, but that’s not the real estate market reality in 2025 when, for a number of reasons, it can take weeks or even months to find a buyer. When that’s the case, the homeowner might have to move to start that new job before the “old” house has sold. In those circumstances, the taxpayer is entitled to deduct up to $5,000 in costs incurred for the maintenance of the old house while it is vacant and on the market. Specifically, costs including interest, property taxes, insurance premiums, and heat and utilities expenses paid to maintain the old residence while it is vacant and efforts are being made to sell it may be deducted. If any family members are still living at the old residence, or it is being rented, no such deduction is available.
It may seem from the forgoing that virtually all moving-related costs will be deductible – however, there are some costs for which the CRA will not permit a deduction to be claimed, as follows:
- expenses for work done to make the old residence more saleable;
- any loss incurred on the sale of the old residence;
- expenses for job-hunting or house-hunting trips to another city (for example, costs to travel to job interviews or meet with real estate agents);
- expenses incurred to clean or repair a rental residence to meet the landlord’s standards;
- costs to replace such personal-use items as drapery and carpets;
- mail forwarding costs;
- mortgage default insurance; and
- costs incurred in the sale of the old home if selling was delayed for investment purposes or until the real estate market improved.
To claim a deduction for any eligible costs incurred, supporting receipts must be obtained. While the receipts do not have to be filed with the return on which the related deduction is claimed, they must be kept in case the CRA wants to review them.
Anyone who has ever moved knows that there are a seemingly endless number of details to be dealt with. For some types of costs, the administrative burden of keeping track of (and retaining receipts for) such moving-related expenses can be minimized by choosing instead to claim a standardized amount. Specifically, the CRA allows taxpayers to claim a fixed amount, without the need for detailed receipts, for travel and meal expenses related to a move. Taxpayers should keep in mind, however, that while detailed receipts are not required, the CRA may still ask the taxpayer to provide some documentation to support their claim.
Using the standardized, or flat rate method, taxpayers may claim up to $23 per meal, to a maximum of $69 per day, for each person in the household. Similarly, the taxpayer can claim a set per-kilometre amount for kilometres driven in connection with the move; that per-kilometre amount ranges from 54.5 cents for Alberta and Manitoba to 71.5 cents for the Yukon. In all cases, it is the province or territory in which the travel begins which determines the applicable rate.
These standardized travel and meal expense rates are those which were in effect for the 2024 taxation year – the CRA will be posting the rates for 2025 on its website early in 2026, in time for tax filing season.
Once eligibility for the moving expense deduction is established, the rules which govern the calculation of the available deduction are not complex, but they are very detailed. The best summary of those rules is found on the form used to claim such expenses – the T1-M. The current version of that form (which was last updated in 2024) can be found on the CRA’s website at T1-M Moving Expenses Deduction – Canada.ca, and more information (including a link to rates for standardized meal and travel cost claims) is available at Line 21900 – Moving expenses – Canada.ca.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
