Selling your house for work? Tax savings often overlooked
Selling Your Home for Work: Tax Deductions Often Overlooked
When thinking about selling a home, people often think about the sale price, listing, showings, negotiation, and the possession date.
But there is one element that is talked about far less: some people who sell their property in a relocation context for work could be eligible for significant tax deductions.
It isn’t automatic. It isn’t applicable to everyone. But in the right circumstances, it can represent substantial savings.
An Important Rule: Moving for Work
In certain situations, a person who relocates to take up a new job, operate a business in a new location, or pursue certain post-secondary studies could be eligible for the moving expense deduction.
One of the important conditions is that the new residence is located at least 40 kilometers closer to the new place of work or study, according to the shortest route on the public road network.
In other words, it isn’t enough to simply move. The move must meet certain precise criteria.
Which expenses can be eligible?
Depending on the situation, several expenses could potentially be claimed.
For example:
- Moving expenses
- Transportation costs
- Storage fees
- Travel expenses
- Some legal fees
- Penalty for early repayment of a mortgage
- Some costs related to selling the old residence
- In certain circumstances, the commission paid to a real estate agent
This last point often surprises homeowners the most.
In an eligible relocation, the compensation paid to the real estate broker when selling the old residence can be part of the costs to consider.
Why it’s important to discuss before selling?
Because a real estate transaction isn’t just about putting up a sign in front of a property.
There is often a broader reflection to make:
- Why are you selling?
- Where are you going?
- Is it related to a new job?
- Is it a professional transfer?
- Does your new residence bring you sufficiently closer to your new place of work?
- What costs should you document from the start?
In some cases, simply keeping the right invoices, contracts, and evidence can make a significant difference when filing your tax return.
The Role of the Broker: Inform, Support, and Guide
A real estate broker is not a tax expert.
However, good real estate guidance should help identify the right questions to ask and the right resources to consult.
My role isn’t just to sell a property.
It’s also to help my clients better understand the possible impacts of their project, to better prepare, and to make more informed decisions.
In a working relocation context, it may be relevant to consult:
- The Canada Revenue Agency
- A accountant
- A tax specialist
- A notary
- And your real estate broker for the sale planning
An Overlooked Saving Can Cost a Lot
Each situation is different, but some people could leave money on the table simply because they didn’t know what to check.
That’s why I believe it’s important to talk about it.
A well-informed consumer is a better-equipped consumer.
And in a real estate transaction, information can sometimes make a big difference.
Are you planning to sell to move closer to a new job?
Before putting your property up for sale, take the time to check whether your situation might be eligible for certain tax deductions.
I’m not a substitute for a tax expert, but I can help you think about your real estate project as a whole and direct you to the right resources.
François Couillard
Residential Real Estate Broker
Via Capitale Sélect
📞 581-745-7879
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