Moving Expenses: Can You Deduct the Cost of Relocating? – A Complete Guide by a Montreal CPA Firm Near You

Moving expenses in Canada are one of the most overlooked tax deductions available to

taxpayers who relocate for work, business, or full-time post-secondary education. When

Canadians move to be closer to a new job, to run a business, or to attend a recognized

educational institution, many of the costs associated with the move can be deducted to

reduce taxable income. However, CRA imposes strict rules, especially regarding the 40-

kilometer requirement, eligible expenses, and the types of income the deduction can be

applied against. Many taxpayers mistakenly claim ineligible costs or do not keep proper

receipts, resulting in denied deductions or CRA reassessments. Understanding how to

claim moving expenses in Canada—including qualifying conditions, the 40 km rule,

eligible costs, and claim timing—is essential to maximizing your refund and staying

compliant.

Legal and Regulatory Framework

Moving expenses in Canada are defined under section 62 of the Income Tax Act. To

qualify, the move must bring the taxpayer at least 40 kilometers closer to their new

place of work or post-secondary education. The deduction applies only when the reason

for the move is to earn employment income, carry on a business, or attend a qualified

full-time educational program. Moving expenses may only be deducted from income

earned at the new location; unused amounts can be carried forward to future years.

Eligible moving expenses include transportation and storage of household items, travel

expenses for the family, temporary living accommodations, the cost of cancelling a

lease, real estate commissions, and legal fees related to selling a home. CRA requires

detailed receipts, mileage logs, and proof of the reason for the move. Revenu Québec

applies similar rules in the provincial Taxation Act, with its own specific forms for

claiming moving expenses.

Key Court Decisions

Several court decisions demonstrate how strictly CRA interprets the rules surrounding

moving expenses. In Gaucher v. Canada, CRA denied a moving expense deduction

because the taxpayer could not prove the move reduced the commute by at least 40

kilometers. The court confirmed that the 40 km rule must be calculated using the

shortest customary route. In Martyn v. The Queen, the Tax Court rejected moving

expenses claimed for a relocation that the taxpayer argued was related to better job

prospects, ruling that the move must be directly tied to new employment or business

income. In Morin v. Canada, CRA denied temporary accommodation expenses because

the taxpayer failed to provide adequate documentation. These rulings highlight the

importance of meeting the strict legal requirements when claiming moving expenses in

Canada, especially the 40 km test and proper record-keeping.

Why CRA Targets This Issue

Moving expenses frequently lead to CRA reviews because many taxpayers

misunderstand what qualifies. CRA closely reviews claims involving large real estate

fees, long-distance travel, temporary living costs, and home-sale adjustments. Common

errors include claiming moving expenses for personal lifestyle relocations, deducting

renovations or repairs, or applying moving expenses against the wrong type of income.

CRA also monitors situations where taxpayers move multiple times within a short period

or claim unusually high costs. Because moving expenses reduce taxable income

directly, CRA enforces the 40 km requirement and evaluates whether the move was

strictly for employment, business, or education purposes. Understanding how CRA

assesses moving expenses is key to avoiding reassessment.

Mackisen Strategy

At Mackisen CPA Montreal, we help clients determine whether their relocation qualifies

for moving expenses and how to maximize the deduction safely. Our first step is

calculating the 40 km rule precisely using transport route mapping to ensure eligibility.

We review the reason for the move, employment contracts, school enrolment

documents, and business records to confirm compliance with section 62. We then

categorize eligible and ineligible expenses, organize receipts, reconstruct mileage logs

if necessary, and allocate costs to the correct tax year. For clients who sell their home

due to relocation, we verify real estate commissions, legal fees, and home-sale

documentation. When clients move long distances, we calculate the most tax-efficient

way to claim travel and accommodation costs. If CRA reviews the claim, we prepare the

response package with full documentation and explanations. Our tailored approach

ensures Canadians claim moving expenses in Canada accurately and confidently.

Real Client Experience

A family moving from Quebec City to Montreal for a new job approached us after CRA

questioned their moving expense claim. They did not calculate the 40 km rule correctly,

and CRA initially disallowed the deduction. We recalculated the route, demonstrated

that the family’s new home was more than 40 km closer to the new workplace, and

provided supporting maps and documentation. CRA ultimately accepted the claim. In

another case, a university student moved to Toronto for full-time studies but did not

realize moving expenses could be applied only against income earned at the new

location. We carried the deduction forward and applied it against the student’s summer

income the following year, maximizing the benefit. A third client claimed ineligible

moving-related renovations. We corrected the return before CRA issued a

reassessment, preventing penalties. These situations show the value of professional

oversight when claiming moving expenses in Canada.

Common Questions

Many taxpayers ask whether renovations, repairs, or home upgrades qualify as moving

expenses. They do not. CRA allows only costs directly related to moving, selling, or

relocating. Others ask whether they can claim moving expenses when moving closer to

family. The move must be for employment, business, or full-time education—personal

moves do not qualify. Canadians also ask whether they must sell their home to claim

moving expenses. Selling is not required; renters can also qualify. Another common

question concerns multiple moves. Moving expenses can be claimed each time,

provided every move satisfies the 40 km rule and the relocation is tied to income.

Taxpayers also ask whether meals, gas, and hotels qualify. Yes, but only if properly

documented. These questions demonstrate the importance of understanding CRA

requirements before claiming moving expenses.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps

Canadians stay compliant while recovering the taxes they’re entitled to. Whether you

are relocating for work, school, or business and want to claim moving expenses in

Canada, our expert team ensures precision, transparency, and protection from audit

risk.