Many Canadians are unaware that certain moving expenses are deductible when computing their income for the year. You are eligible for deductions if you are moving to:
a. A new location to start of continue a job or business.
b. Attend courses full-time at a post-secondary institution.
Expenses that can be deducted include:
1. Traveling expenses (including vehicle expenses, meals and accomodation).
2. Transportation and storage of personal effects.
3. Cost of cancelling a lease at your previous residence.
4. Mortgage penalty.
5. Meals and accomodation (up to 15 days worth) near either residence if your moving days do not coincide.
6. Costs of selling your previous residence, including real estate commission.
7. Legal fees on sale of previous residence and purchase of new residence.
8. Utilities disconnection/reconnection fees.
9. Mortgage interest, insurance, property taxes and utilities associated with your old residence while attempting to sell it, to a limit of $5000 for up to a three-month period.
Expenses that are NOT includes are:
1. Loss on the sale of your previous home.
2. Expenses for house-hunting trips before your move.
3. Cost of work done to your former residence to make it more saleable.
Deduction is limited to income earned at the new location. You can carry forward unclaimed moving expenses into the year following your move, to apply against that year's earnings.
For more information please speak with an accountant.