Deducting your moving expenses – Real Estate Tax Tips

Deducting your moving expenses – Real Estate Tax Tips

March 27, 2014 in Investment Real Estate, Vancouver Real Estate News

Tax time is nearly upon us, and as we look to file our returns, it’s important we are aware of the maximum number of deductions we are entitled to, and file them accordingly. One deduction that you might not be aware of is your Moving Expenses. Let’s take a look an an excerpt from

Line 219 Moving Expenses

If you moved at least 40km to be closer to a new job, to run a business, or to attend a post-secondary educational institute full time, then you may deduct moving expenses, up to the amount you earn at the new location, or up to the amount of award or scholarship income received in the year.

Normally, for the relocation to be an “eligible relocation”, both the old and the new residence must be located in Canada, except in the case of a full-time student. However, a move between two locations outside of Canada can also be an “eligible relocation” if:

bullet you are a Canadian resident (either factual or deemed) living out of the country, and
bullet you moved from the place where you ordinarily resided, to live in another place where you ordinarily reside.
You may carry excess expenses forward to be offset from income earned at the new location in the next year. When both spouses have moved and subsequently earn income in the new location, the moving costs can be split between the spouses.

Many costs are deductible as moving expenses, including:

  • transportation and storage costs for household effects
  • travel, including vehicle costs and reasonable costs for meals and accommodations in the course of moving the taxpayer and members of the taxpayers household from the old residence to the new residence
  • costs of cancelling a lease for the old residence
  • real estate commission, advertising, legal and other costs re selling the old residence
  • legal fees re the purchase of a new home, and any tax, fee or duty (other than GST or value-added tax) imposed on the transfer or registration of title to the new residence
  • costs re maintaining the old residence, up to a maximum of $5,000, while the old residence is either vacant, or not occupied by any person who ordinarily resided with the taxpayer at the old residence immediately before the move, and while the old residence is not rented by the taxpayer to any other person. These costs are deductible as long as reasonable efforts are made to sell the old residence
  • change of address costs, such as replacement of drivers’ licenses, non-commercial vehicle permits, and costs of connecting or disconnecting utilities

Note that if any moving costs have been reimbursed by your employer, then the moving costs must be reduced by the amount received, unless the reimbursed amount is included as income elsewhere on your tax return.

It’s worth noting here that we are not accountants, and you should run this past your accountant to see if you qualify for this deduction!

Check out this additional information from the CRA:

Line 219 – Moving expenses

Form T1-M moving expenses deduction

Interpretation Bulletin IT-128 Moving expenses

As always, my phone is always on, call me at +1 778 385 6141!

Accountant, Real Estate Accountant in Vancouver, Real Estate Deductions, Tax, Tax Time

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