Relocating for work or school? If you are moving to start a new job, run a business or study full-time at a post-secondary level, you may be eligible to deduct some of your moving expenses from your income taxes.
Eligibility rules are the same for both the Canada Revenue Agency and Revenu Québec. If you want to deduct moving expenses, your new home must put you at least 40 km closer to your workplace or school.
Expenses you can deduct:
moving company fees
rental fees for a truck or trailer
storage costs for your household belongings
food and lodging expenses for you and your family during the trip to your new home
the cost of selling your old home or cancelling your lease
the cost of upkeep for your old home if it remains vacant for a time despite reasonable efforts to sell (maximum $5,000)
While nearly half of Canadian homeowners don’t plan to sell their homes when they retire, many are still unsure what they’ll do. Moving to a new city or downsizing to a more compact home can offer advantages but, depending on your goals, a few disadvantages as well. If you’re thinking about a post-retirement move, consider these pros and cons before you start packing:
When you relocate to a new city or property…
PRO: Save money on daily expenses: If you relocate to a less expensive area, you’ll be able to stretch your retirement savings further. Consider the benefits of a suburb vs. city, and look to exotic areas that provide a lower cost of living. Need a little inspiration? Mexico, Panama, and Costa Rica are popular post-retirement spots for Canadians. Or, look to Buenos Aires, Argentina, where you can rent a one-bedroom apartment (in a good area!) for as little as $400 a month.
CON: Spend money on moving costs: Even if you’re exchanging your current digs for a less expensive property, moving isn’t cheap — real estate agent expenses, land transfer tax and moving costs can dissolve a big chunk of money. In Toronto, for example, land transfer costs, legal fees and moving expenses alone could be $15,000 or more. Plus, you’ll have to consider the cost of traveling to visit family, but if you pick a tropical locale, Canadian relatives may be more likely to come to you.