Deduct moving expenses when you relocate for work or school
Moving expenses
Section 62 allows individuals to deduct eligible moving expenses when they move at least 40 km closer to a new work location or a full-time post-secondary school.
Plain-language explanation
Section 62 provides a deduction for moving expenses when you relocate for work, to start a business, or to attend a post-secondary institution full-time. The deduction reduces your income earned at the new location.
The 40 km rule: Your new home must be at least 40 kilometres closer (by the shortest usual public route) to your new work or school than your old home was. The 40 km is measured by road distance, not straight line.
Eligible moving expenses include: Transportation costs for yourself and family, costs to move household goods, temporary board and lodging (up to 15 days), costs to maintain old home while trying to sell (up to $5,000), lease-cancellation costs, costs to sell the old home (real estate commissions, legal fees), costs to buy the new home (legal fees, land transfer tax — but only if you or your spouse sold the old home), and the cost to connect/disconnect utilities.
The income limit: Moving expenses can only be deducted against income earned at the new location (employment income, business income, or student scholarships). Unused amounts carry forward to the following year.
Students: Full-time students can deduct moving expenses against taxable scholarships/bursaries received at the new institution. This is a valuable deduction for graduate students.
Example
Jaime moves from Winnipeg to Calgary for a new job. The old home was 2,000 km from the new workplace; the new home is 10 km. Moving costs: $4,500 truck rental, $600 gas, $450 lodging during move, $8,000 real estate commission on selling the old home. Total eligible expenses: $13,550, deductible against Calgary employment income.
Amendment history
Significant changes to this provision. Older versions help you understand rules that applied in prior tax years.
List of eligible moving expenses codified into regulations to provide clarity on what qualifies, including temporary living costs (15-day cap) and costs to maintain vacant former home ($5,000 cap).
Common questions
Can I deduct the cost of buying my new house? +
Only certain buying costs qualify: legal fees and land transfer tax on the new home, but only if you sold your old home. The purchase price itself is not deductible. Real estate commissions and legal fees on selling the old home are fully deductible.
What if my employer reimburses my moving costs? +
Moving expense reimbursements from your employer are generally included in your employment income (s.6). However, you can then deduct the same moving expenses under s.62, resulting in a wash — neither taxed nor deducted on net.
Key terms
Related sections
Source: Income Tax Act, RSC 1985, c. 1 (5th Supp.), section 62. — Read the official text on Justice Canada
These summaries are for educational purposes only and do not constitute legal or tax advice. Speak with a CPA for advice on your specific situation.