Relocating for a New Job? A Stage-by-Stage Map of Which Home-Sale and Purchase Costs Count as Moving Expenses in Canada
From the day the offer arrives to the tax return the following spring, each stage of a move generates its own bills. The Income Tax Act treats them differently depending on when they land and why.
If a new job (or full-time studies) moves you far enough, which of the costs of selling your old home and buying the next one can be deducted as moving expenses?
If the move is an “eligible relocation” — your new home is at least 40 km closer to the new work location than your old home was — the Income Tax Act lets you deduct costs as they arise along the way: the selling costs of the old home (commission, legal or notary fees, advertising, a mortgage prepayment penalty); up to $5,000 of interest, property tax, insurance, heating and utilities while the old home sits empty and listed; and, only if the old home was sold because of the move, the legal fees and land-transfer-type taxes on buying the new one. Other costs of acquiring the new home are not included.
Source: Income Tax Act, ss. 62(3) and 248(1) “eligible relocation” (Justice Laws Website, current to 2026-09-21); Canada Revenue Agency, Line 21900 – Moving expenses (2026).
I’m Arthur Zhao, a real estate broker with AZ Real Estate Partners in Toronto. Before anyone in a job relocation talks about commissions or closing dates, there is a piece of arithmetic that decides whether any of the housing costs can be deducted at all — and it is not “how far did I move.” Picture this illustration: your old home is 55 km from the new office, and the home you buy is 10 km from it. The difference is 45 km, so the new home is at least 40 km closer to the new work location, and the move clears the distance test. Now flip it: a move of 60 km across the region that leaves you only 30 km nearer the new job does not, however long the moving truck’s route was.
That single comparison unlocks everything else. After it, the question becomes when each cost shows up — because the sale of one home and the purchase of another stretch across months, and the Act treats a bill differently depending on which stage of the move produced it. The walk-through below follows one relocation in order, from the offer to the tax return.
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Stage 1 — The offer arrives: test the move before spending anything
- Purpose: you are relocating to be employed or carry on business at a new work location, or to attend post-secondary school full time.
- Residence: you ordinarily lived in the old home before the move and ordinarily live in the new one after it.
- Canada: both the old and new residences are in Canada.
- Distance: the old home’s distance to the new work location is at least 40 km greater than the new home’s distance to it.
According to the Canada Revenue Agency (2026), that distance is measured “by the shortest public route”.
What does not count at this stage: CRA lists travel for house-hunting trips before you move, and travel for job hunting in another city, as non-deductible. Keep a record of the new employer’s or school’s address and the dates — it is the anchor for the distance test later.
Stage 2 — Listing the old home
Counts: advertising is one of the selling costs CRA names for the old home, and selling costs fall under s.62(3)(e).
Does not count: CRA lists “expenses for work done to make your old home more saleable” as non-deductible. Repairs or upgrades done to help the sale are on the wrong side of that line.
If you rent rather than own, the equivalent cost at this stage is ending the lease: the cost of cancelling the lease on the old residence is included under s.62(3)(d). CRA excludes the cost of cleaning or repairing a rented home to meet the landlord’s standards.
⚠️Timing matters for the sale. CRA states that selling costs are not deductible if you delayed selling the old home for investment purposes or until the real estate market improved. A decision to hold rather than sell can change the tax treatment of the eventual commission and legal fees.
Stage 3 — You have moved; the old home is empty and still for sale
- neither you nor anyone who lived with you before the move ordinarily lives there,
- it is not rented out, and
- reasonable efforts are being made to sell it.
This is also when the physical move happens, which s.62(3) also covers: travel for you and your household (including reasonable meals and lodging) from the old home to the new one, transporting and storing household effects, and meals and lodging near either home for up to 15 days.
Keep the monthly statements — mortgage interest, the tax bill, insurance, utilities — along with proof the home was listed, because the three conditions above are what make those bills qualify.
Stage 4 — The old home closes
- real estate commission,
- notary or legal fees,
- advertising (from Stage 2), and
- the mortgage penalty when the mortgage is paid off before maturity.
Two things do not come along. A loss on the sale of the home is not a moving expense. And CRA states that costs incurred in selling the old home are not deductible if you delayed selling for investment purposes or until the real estate market improved.
What to keep: the commission invoice or statement of adjustments, the lawyer’s account, and the mortgage payout statement showing any prepayment charge.
Stage 5 — The new home closes
There is a condition attached: those purchase costs count only where the old residence is sold by you or your spouse or common-law partner as a result of the move. If you keep the old home, the purchase-side costs fall away, even though the move itself may still be eligible.
Everything else about acquiring the new home is excluded — s.62(3) says the costs of acquiring the new residence are not included, other than those in (f). CRA also lists mortgage default insurance as non-deductible.
ℹ️This article describes the federal rules as written. It is not tax advice — how they apply to a particular move (employer arrangements, income timing) is a question for your accountant or tax professional.
Stage 6 — Settling in at the new address
CRA excludes mail-forwarding costs, transformers or adaptors for household appliances, and replacing personal-use items such as tool sheds, firewood, drapes and carpets.
💡 My own view is that the stage deserving the most attention is Stage 3, not the closing table. Commission and legal fees are documented automatically by the transaction; the vacant-home costs are not. Whether they qualify depends on facts that are easy to break without noticing — someone from the household staying on, a short-term tenant, or the listing lapsing — and the cap is the lesser of $5,000 and what was actually spent in that window. It is worth knowing the three conditions before the keys are handed over, and then deciding with your accountant how they apply to your situation.
Stage 7 — The following spring: the return, the ceiling, and carry-forward
Form T1-M and entered on line 21900 of the return. CRA says to complete a separate T1-M for each eligible move, and not to send receipts with the return but to keep them in case CRA asks to see them.
Section 62(1) then applies a ceiling and three other conditions:
- the total deducted cannot exceed your income for the year from employment or business at the new work location (for students, the specific student income the section refers to);
- amounts paid on your behalf by your employer in connection with your job are not deductible by you;
- any reimbursement or allowance you received for these expenses must be included in your income; and
- an amount deducted under s.62 in the previous year cannot be deducted again.
If the expenses exceed that year’s new-location income — for example, when the move happens late in the year and only a few months of new salary are earned — CRA says the unused amount can be deducted in a future year against employment or self-employment income earned at the new work location.
Do You Really Pay No Tax When You Sell Your Home? The Principal Residence Exemption, Reporting Rule & Flipping Rule Explained →Adjusted Cost Base & Capital Improvements: How Good Records Cut Your Tax When You Sell a Rental or Cottage →A Complete Breakdown of Buyer Closing Costs in Ontario →Ontario Home Buying Guide →
Frequently Asked Questions
How do I know if my move is far enough to claim moving expenses?
Compare two distances to the new job or school: from your old home, and from your new home. The move qualifies on distance if the new home is at least 40 km closer, measured by the shortest public route (CRA, Line 21900). How far the homes are from each other does not decide it.
Can I deduct the mortgage and property tax on my old house while it sits empty?
Yes, within limits. Income Tax Act s.62(3)(g) allows interest, property taxes, insurance, heating and utilities up to the lesser of $5,000 and the actual total, for the period when no one from the household lives there, it is not rented, and reasonable efforts are being made to sell it.
Is the land transfer tax on my new home a moving expense?
It can be. Section 62(3)(f) includes taxes or fees on the transfer or registration of title to the new home (GST/HST excluded) and the legal fees for the purchase — but only if you or your spouse or common-law partner sold the old home as a result of the move.
Are renovations to help my house sell deductible?
No. CRA lists expenses for work done to make the old home more saleable as non-deductible, along with any loss on the sale. Advertising, commission, legal or notary fees and a mortgage prepayment penalty on the sale are the selling costs CRA lists as deductible.
What happens if my moving expenses are bigger than what I earned at the new job this year?
The deduction is capped at your income from the new work location for the year (Income Tax Act s.62(1)(c)). According to CRA, the unused portion can be carried forward and deducted in a later year against employment or self-employment income earned at the new location. The calculation is done on Form T1-M.
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