Finance
How to Pay Off Your Mortgage Faster in Quebec
Your lender offers to switch you “to biweekly.” Two options carry almost the same name and only one of …
Every spring, Quebec taxpayers put their moving expenses on their return and have them refused. The reason almost always comes back to the same point: the distance was measured between the old home and the new one. That is not the test. Here is the exact rule, what is deductible, what never is, and the two forms you have to fill out.
The 40 km rule, measured the way both tax authorities measure it
Quebec’s TP-348 form sets out the calculation in three lines, and that is the clearest way to understand the rule.
- Line A: the distance between your former home and your new work or school location.
- Line B: the distance between your new home and that same new work or school location.
- Line C: A minus B. If the difference is less than 40 kilometres, your moving expenses are not deductible.
The reference point is the new work location, never the former residential address. The federal T1-M says the same thing in other words: the new home must be at least 40 kilometres closer to the new work or school location, by the shortest route through the public road system.
The word “public” matters. You do not measure in a straight line, and you do not pick whichever route suits you. The TP-348 specifies that the distance is established by the shortest public route, ferries included. Income tax folio S1-F3-C4 from the Agence du revenu du Canada (the federal revenue agency) points to the case law: the normal shortest route available to the travelling public.
What that means in Greater Montreal: a lot of moves fail the test. Going from one Laval sector to another, or from Laval to Montreal, does not necessarily cut 40 kilometres off the distance to the same employer.
Who qualifies for the deduction, and who does not
Employees and self-employed people who move to take a job or run a business at a new location. The TP-348 adds practising a profession and accepts seasonal employment.
Full-time students enrolled in a post-secondary program at a university, a college or another educational institution. The T1-M also allows expenses incurred at the start of each academic period, and covers the co-op student going back to school after a work term or after the summer.
Who does not qualify: anyone who moves without a new work location or a new place of study. The TP-348 requires the address of both the former and the new work or school location, with the date of the change. The T1-M adds a limit that often gets missed: these expenses cannot be deducted from investment income or from employment insurance benefits.
If your employer paid you an allowance or a reimbursement, you can only deduct these expenses by adding the amount received to your income or subtracting it from your expenses. In Quebec, part 3 of the TP-348 has to be completed and signed by the employer even if the employer paid nothing.
Eligible expenses, including the broker’s compensation
This is where most taxpayers leave money on the table. The costs of selling the former property and buying the new one are eligible, and they are the largest amounts on the form.
| Item | What the forms accept |
|---|---|
| Transportation and storage | Packing, hauling, movers, temporary storage, insurance |
| Travel | Vehicle, meals and accommodation while travelling |
| Temporary living expenses | Meals and accommodation near the former or the new home, maximum 15 days |
| Cancelling a lease | The cancellation costs, not the rent paid before the cancellation |
| Incidental costs | Revising legal documents, replacing the licence and vehicle registration, connecting and disconnecting utilities |
| Vacant former home | Interest, property taxes, insurance, heating, electricity, maximum $5,000 |
| Selling the former home | Broker’s commission, notary’s fees, advertising, mortgage penalty |
| Buying the new home | Legal fees, transfer duties, registration of rights |
The $5,000 cap applies to the period during which serious efforts were made to sell the home left vacant. These costs do not cover a period when the former home was rented out, nor a period when it was occupied by you or by someone who ordinarily lived there with you before the move.
The costs of acquiring the new home are eligible only if you or your spouse sold the former one because of the move. If you keep the former property, the transfer duties on the new one do not pass. The TP-348 names them explicitly, together with registration of rights at a bureau de la publicité des droits (a Quebec land registry office). The T1-M speaks instead of any taxes paid, other than GST and HST, for the transfer or registration of title. To put a number on that item, the welcome tax calculator gives you the amount in seconds, and the article on the taxe de bienvenue explains who pays it and when.
On the selling side, the TP-348 also accepts surveying costs, which covers boundary determination and the certificat de localisation (the location certificate). And if you pay your mortgage off early, the penalty is eligible: calculating the mortgage penalty is done before, not after.
The moving costs that are never deductible
The T1-M sets out a closed list, and it targets precisely the expenses sellers believe they can claim.
- Work done to make the former home more attractive, and any loss on the sale.
- Trips paid for before the move to look for a home at the new location or a job in another city.
- The value of items the movers refuse to take: plants, frozen food, ammunition, paint, cleaning products.
- Cleaning or repairs to a rented dwelling required by the landlord.
- Replacing personal use items: sheds, firewood, drapes, carpets.
- Mail forwarding, transformers and adapters.
- The costs of selling the former home if you delayed listing it for investment reasons or to wait for better market conditions.
- Mortgage default insurance.
That last line about the delayed listing is the one that surprises people most. Preparing the house and waiting for the right moment remain perfectly legitimate, but they come out of your own pocket.
Two forms: T1-M federally, TP-348 in Quebec
A Quebec resident fills out two forms for a single move.
Federally, the T1-M calculates the deduction you enter on line 21900 of your return. A separate form is required for each eligible move.
In Quebec, the TP-348 leads to line 228 and must be filed with the return. Its part 3 requires the employer’s signed declaration. Its line 23, the eligible income line, covers net employment or business income earned at the new work location plus benefits received during the year under the Programme de protection des salariés (the wage earner protection program), and its student component refers to the net amount of research grants. Federally, the student’s deduction is open to scholarships, fellowships and bursaries, to research grants and to certain prizes included in income. Two different wordings: have your case validated by an accountant.
The income limit at the new location, and the carry forward
The deduction is capped by the net eligible income earned at the new work location during the year. On the TP-348, line 24 asks for the lesser of your net expenses and that income. The T1-M works the same way.
The typical case: a move in November, with selling costs that far exceed the two months of salary earned at the new location.
The balance is not lost. The unused portion carries forward and is deducted from employment or business income earned at that same new work location in a future year. For a full-time student, the carry forward applies to the same type of income. The TP-348 provides the mechanism at its lines 18 and 20, and lets you file the form solely to carry forward expenses from an earlier year.
The carry forward goes one way only. The T1-M is blunt: your expenses never go back to a previous year. An expense paid in the year after the move is deducted on the return for the year it was paid. That comes up often when the former property sells the following year: the Agence du revenu du Canada may then ask for the receipts and a note explaining the delay.
Records to keep, and the mistakes that trigger a review
The TP-348 says not to attach your receipts, but to keep them so you can provide them on request. The T1-M specifies that the Agence du revenu du Canada can ask for a letter from your employer confirming that you were not reimbursed. The document is requested after the fact, and that is where a file is won or lost.
The documents to keep when you move for work: the notary’s statements on both the sale and the purchase, the account statement showing the broker’s compensation, the lender’s penalty calculation, the mover’s contract, the temporary accommodation invoices with their dates, and a screenshot of the route used for lines A and B.
The mistakes that keep coming back: measuring between the two homes, claiming purchase costs without having sold the former property, deducting staging expenses, forgetting to subtract the employer’s reimbursement, stretching vacant home costs over a rental period.
For meals and vehicle use, both tax authorities offer a detailed method with receipts and a simplified method at a flat rate. Each administration publishes its own rates, and they change from one year to the next.
Frequently asked questions
I am moving from Laval to Montreal for a new job. Does it qualify? Only if the new address brings you at least 40 kilometres closer to the new work location, by the shortest route through the public road system. Run the line A and line B calculation before anything else.
Is my broker’s commission really deductible? Yes. The commission paid to the real estate broker is one of the costs of selling the former home on the TP-348, along with the notary’s fees, the advertising and the mortgage penalty. The move still has to qualify.
Does anything change if I keep my former house and rent it out? Yes. The costs of acquiring the new home require the former one to be sold, and vacant home costs do not cover a rental period. Homeowner tax in Quebec takes over from there.
To go further, read the Greater Montreal moving checklist, deadline by deadline and the real cost of selling a house in Quebec.
Selling because a new job is taking you away from your current address? Reach out, and we will work out the distance and the cost of selling before we set a listing date.
Georges Matar
Residential Real Estate Broker · RE/MAX DU CARTIER INC.
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