For most homeowners in Canada, paying for moving services can be an unwanted but necessary expense. Coupled with the stress of relocating yourself or your family from one place to another, the hassle can take out all the joy of settling in a new home.
With the right steps and preparation, it is possible to maximize the efficiency of your move, minimize the expenses, and keep the stress levels from sending you over the edge. Today, we want to answer some critical questions about moving expenses and what’s tax-deductible in a move.
We’ll give you a general idea of how much moving companies cost and provide a few essential tips to help you save on your upcoming home and apartment moving.
Are Moving Expenses Tax-Deductible in Canada?
Because homeowners are always looking for ways to save, a common question that comes up is whether moving expenses are tax-deductible. If you’re wondering, “Can I claim moving expenses?”, here’s the breakdown.
Claiming Moving Expenses
In short, you can claim moving expenses on your taxes in specific scenarios, primarily if you are moving for school or work. However, this rule comes with certain caveats:
- Distance Requirement: Your new residence must be at least 40 km closer to your workplace or school than your old one.
Importance of Documentation
Regardless of your eligibility for a tax refund, always keep all receipts and paperwork for anything you paid or signed. It’s important to ensure there is a clear paper trail and that everything is accounted for in your moving budget.
Work Relocation
If you are moving for work, it doesn’t necessarily have to be for a new job. You can claim your expenses for relocation even if you’re staying with the same company.
Income Considerations
When planning to claim moving expenses, remember:
- You can only claim income earned at the new location.
- If you move closer to the end of the year, your moving costs may exceed the income from the new job.
Carrying Over Moving Expenses
It is possible to carry over your moving expenses in Canada and claim them against the next year’s income. This is a straightforward way to save on moving costs.
Employer Reimbursements
Employers often offer to reimburse most or part of your moving costs. This can be more beneficial than relying on a tax return because:
- The employer covers the costs dollar for dollar.
- With a tax refund, you’ll likely receive only a percentage of the total expenses.
Self-Employment Considerations
If you are self-employed, you can claim moving expenses against your personal income, but not under income from stocks or investments.
School Relocation Rules
When moving for school, the main rule is that your new place must be established as your primary residence. This involves:
- Transferring required documents.
- Changing your address to that location.
If you’re renting while studying but maintain your home address elsewhere, you cannot deduct your moving expenses.
Conclusion
Understanding how to claim your moving expenses on a Canadian tax return can put more money back in your pocket. This knowledge allows you to reinvest in your home and watch its value grow.
Important Note: Not all moving expenses in Canada are deductible, even if you meet the eligibility criteria mentioned above.
Which Moving Expenses are Tax Deductible in Canada?
Households often ask, are moving expenses tax-deductible in Canada? The answer is yes, some of them are. Here is a list of moving expenses that you can claim on your tax return:
- Costs related to transportation: moving, hauling, packing, and replacement value protection or insurance.
- Any storage costs for household goods or vehicles.
- Travel costs for you and your family, including meals, vehicle costs, and accommodation.
- Temporary living costs you may incur, up to 15 days.
- Any costs associated with changing your legal documents.
- Costs of cancelling your old rent or lease agreement.
- Costs for selling your home include advertising, legal fees, and realtor commission.
- Costs for purchasing your new residence: taxes, notary, title transfer costs.
Which Moving Expenses in Canada are not Tax Deductible?
As much as it would be nice to be able to claim everything, some costs associated with moving cannot be claimed on your tax return. These include:
- Any costs associated with making your home more saleable: repairs or cosmetic.
- Any monetary loss from selling your house.
- Any costs you incurred while looking for your new residence.
- Expenses for job hunting in another city.
- Costs associated with bringing your current residence back into its original state.
- Costs to replace personal items damaged or lost in the move or at the old residence.
- Mail forwarding costs.
How to Claim Moving Expenses on Your Tax Return?
On top of filling out Line 219 on your tax return, you should also complete form T1-M, “Moving Expenses Deduction.” You will specify where you moved from and why and specific details and dollar amounts of your move on this form.
Keep in mind when you’re filing Line 219 on your tax return, you’re not required to file the T1-M, nor do you have to file any of the receipts. You are, however, required to have these forms on hand when claiming your moving expenses if CRA does decide to inquire further.
Optional Method for Claiming Moving Expenses on Your Tax Return
If you are not one for keeping track of all your expenses or simply don’t have the receipts or supporting documentation, you can claim some of your moving expenses in Canada under optional rules:
- Meal expenses: Flat rate of 17$ a meal, up to a maximum of 51$ per person per day.
- Vehicle expenses: There is a flat rate to calculate the number of km by the cents-per-km rate. This rate differs based on the province of origin for your move, so be sure to check out moving expenses on the CRA website to find out which rates strictly apply to you.
Even if you have receipts for your move, these optional claim methods may be more beneficial to you. Why not take advantage of every tool at your disposal, so you can save on moving costs. Be sure to calculate both ways of claiming your moving expenses to get the more significant benefit.
What Do Moving Companies Charge: Figuring, Out Residential Moving Costs
Now that you have a better idea of what you can and can’t claim, let’s see what you can expect to spend on moving.
Local Moving Costs
A local mover can cost anywhere between $90-120 an hour in Ontario, depending on the time of the month you are moving in. In other provinces, these rates can range between $60-150. Remember, mover prices can increase as much as 20% at the end/beginning of the new month, so you will be looking at paying in the upper end of that range.
Depending on the number of things you have, your move may also require an additional mover. Additional moving help usually costs between $40-60 per hour, depending on the company. This can cost between $30-60 per hour if you need packing services.
Keep in mind you are also required to pay a one-time truck fee for local moves. Depending on where in Canada you live and what time of the month you are moving, the truck fee can be between $85-120.
Another thing to consider is whether you have many things that require heavy lifting or additional muscle. Things like appliances, gym equipment, or any other specialty items that require heavy lifting can add between $40-90 to the cost of your move each.
Factor stairs into the final price of your move. If the movers have to use the stairs, even the number of steps can add to the total. Plan to spend anywhere between $40-100 additionally, depending on the length of your staircase.
Long Distance Moving Costs
Here are some important numbers to consider when looking for long-distance house movers. Since the final quote depends on the weight of your items, it’s crucial that your belongings are weighed to price the move accurately.
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Weighing Costs:
This can cost anywhere between $50 to $100, and it’s often where disputes between homeowners and moving companies begin. Many unreliable moving companies will intentionally lower the initial quote to get the customer on board, only to increase the price once the items are weighed and found to be heavier than initially quoted.
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Base Charges:
There is usually a base charge for the first 500 lbs of items, which can range between $500 to $700 depending on the moving company. Additional weight can cost anywhere between $400 to $600 for every additional 500 lbs, depending on the distance your belongings must travel. If you require packing assistance, the fee per 1,000 lbs can range between $200 to $400.
How Can You Save Money on your Upcoming Residential Move
aving money on your residential move involves strategic planning and utilizing various cost-cutting techniques. Here are some practical tips to help you minimize expenses:
Choose the Right Time to Move
Moving during off-peak seasons, such as winter or mid-week days, can significantly reduce your moving costs. Moving companies are less busy during these times and may offer lower rates.
Declutter and Downsize
Reducing the number of items you need to move can save money on both packing supplies and moving costs. Host a garage sale, sell items online, or donate to charity.
Get Multiple Quotes
Always obtain quotes from at least three different moving companies. This will help you compare prices and services to find the best deal.
| Moving Company | Estimated Cost | Services Included | Special Offers |
|---|---|---|---|
| Company A | $1,200 | Full Service | 10% off for seniors |
| Company B | $1,400 | Packing Only | Free storage for a month |
| Company C | $1,300 | Transport Only | Price matching available |
Pack Yourself
Packing your own belongings can save on labor costs. Start collecting free boxes from local stores, use newspapers for wrapping fragile items, and label everything clearly.
Use Portable Storage Containers
Portable storage containers can be a cost-effective alternative to traditional moving services. These containers are delivered to your home, you pack them at your convenience, and the company transports them to your new location.
| Service Type | Estimated Cost |
|---|---|
| Traditional Moving Truck | $1,500 |
| Portable Storage Container | $1,000 |
Utilize Discounts
Many moving companies offer discounts for seniors, students, military personnel, and repeat customers. Always ask about available discounts and promotions.
Claim Moving Expenses on Taxes
If you’re moving for work or school, you may be eligible to claim moving expenses on your Canadian tax return. Keep all receipts and documentation to support your claim.
Negotiate with Moving Companies
Don’t hesitate to negotiate with moving companies. Ask if they can match or beat a competitor’s quote, and inquire about any hidden fees that could be waived.
By implementing these strategies, you can significantly reduce the cost of your residential move, making the process more affordable and less stressful.
Conclusion
Saving money on your residential move in Canada is achievable with careful planning and smart decisions. By choosing the right time to move, decluttering your home, obtaining multiple quotes, and packing yourself, you can significantly cut costs. Additionally, taking advantage of discounts, portable storage options, and tax deductions can further reduce expenses.
Comparative Savings: Moving Company vs. DIY Move
| Expense Category | Moving Company | DIY Move | Potential Savings |
|---|---|---|---|
| Moving Truck Rental | Included | $100 – $200/day | Up to $200 |
| Packing Supplies | $100 – $300 | $50 – $100 | Up to $200 |
| Labor Costs | $500 – $1,000 | Free (with help from friends/family) | Up to $1,000 |
| Fuel Costs | Included | $100 – $150 | Up to $150 |
| Insurance | $50 – $150 | $50 – $150 | – |
| Total Estimated Cost | $750 – $1,700 | $300 – $600 | Up to $1,100 |
By comparing the costs, it’s clear that opting for a DIY move can lead to substantial savings. However, it’s essential to weigh the convenience and time savings provided by professional movers against the cost savings of a DIY approach.
Remember, negotiating with moving companies and staying informed about all aspects of the move can help you avoid unnecessary fees and scams. With these strategies, you can make your move more affordable and less stressful.
If you need assistance with your move or want to request a quote, our company offers reliable and cost-effective moving services tailored to your needs. Contact us today to get started and ensure a smooth transition to your new home.
