October 22, 2026 · Tax Planning and Preparation

Moving to Another Province Within Canada: Be Mindful of Changes in Taxes

An image of a moving van outside of a house in Oakville Ontario

Many Canadians move to another province to live, work, or study. The move could be temporary or permanent, or it could start as temporary and become permanent. The move brings many changes: a new neighbourhood, business environment, and home. While your moving list includes all these things, one more thing people often overlook is changes in taxes. Canada has a federal and provincial tax system. Federal taxes and benefits are the same across Canada, but provincial taxes and benefits differ, as each province sets its own tax rates, brackets, and available credits.

The highest marginal tax rate, including federal and provincial tax, can range from 44.5% to 54.8%, depending on the province. As a result, many wealthy people move to take advantage of lower-tax provinces. As a result, the Canada Revenue Agency (CRA) pays close attention to provincial residency issues to ensure the move is genuine and not just a way to take advantage of lower-tax provinces.

In this article, we’ll cover what you should know and do when moving to a new province.

The Timing of Your Move Can Change Your Taxes

A common misconception is that you file taxes where you work or live, or where you earned most of your income that tax year. However, the CRA considers your tax residency as of December 31, not where you lived most of the year. Even if you moved to X state in November 2026, the tax rates of X state will apply for the entire 2026 tax year. This can be a good thing if you move to a low-tax province but a tax disaster if you move to a higher-tax province.

Update your address and include your move date to ensure your taxes are calculated correctly and the Notice of Assessment is sent to the right address. A common query is: what if you work in one province and your family lives in another? Can you be a resident in both provinces? The answer is no. When you travel between provinces, tax residency serves as the tie-breaker.  

Change in Residency vs. Temporary Move

Tax residency is not about where you were physically present on December 31, or where you live. It is about where you have close residential ties, such as your permanent residence, where your spouse or dependants live, where you keep personal belongings, your driving licence, and the address you receive your mail.

So if you have been travelling between provinces or went to another province to study but often travel back to your parents’ house, which you treat as your main address, the CRA will consider that your residency.

A temporary shift to another province does not automatically change residency. This topic has been debated in several court cases, and courts look at stronger residential ties to determine tax residency. However, tax residency can get complicated for people going through separation or divorce.

Why Tax Residency Matters?

You can’t avoid identifying your tax residency because delays in filing taxes and informing the CRA of your residency change may affect benefit payments or tax refunds. At the same time, you should be careful with address changes, as inconsistent addresses on slips, reporting income in one province while claiming benefits in another, or sudden year-end moves can trigger reassessments. The CRA will verify your provincial residency using employment records, utility bills, medical card registrations, school enrollment, driver’s licence, and more.

How Can a Professional Accountant Help

When you plan a move, work with a professional accountant to determine your correct tax residency and file your tax return in a compliant way. The accountant will view your situation through the CRA lens, gather documents that verify your residential ties, such as work locations, rental agreements, travel records, and marital status, and then file your taxes. They will ensure your filings do not trigger reassessment. If the CRA still conducts a reassessment, an accountant can represent your case with documentary evidence.

Changes in Benefits and Credits

Once your tax residency is clear, you should understand and follow the province’s tax laws. Each province has different goods and services tax/harmonized sales tax (GST/HST) credits, Canada Child Benefit, health premiums, and other provincial programs and benefits. Some indirect provincial credits include property tax credits, home heating cost rebates, education property tax grants, tuition transferability between spouses and dependents, and low-income credit supplements. While they don’t affect your income tax, they do affect your expenses.

When you update your address with the CRA, most of these benefits adjust automatically. However, the timing depends on when you update your details.

What Happens to Your Payroll

For payroll, your employer deducts income tax, Employment Insurance, and other deductions based on federal and provincial rates. If you move provinces in August, payroll deductions through July will be based on your old province. The CRA will reconcile the deductions and refund or add the rate difference in tax filings. On your end, you must report all income from both provinces and ensure your employer has your updated address so they can make the correct deductions.

Remember, your T4 slips and income tax returns should have the same province. Multiple addresses trigger scrutiny.

Moving Expense Deductions: When and What You Can Claim

Moving expenses aren’t necessarily tied to changing provinces. You can even move within the same city or province. The condition is that the new place should bring you at least 40 km closer to a new job, a new business, or a post-secondary institution for a full-time course. If you meet the distance criteria (even if it means changing provinces), you may be able to deduct moving expenses from your taxable income in the year you move.

The moving expenses cover everything from

  • Leaving your old apartment – Lease cancellation costs and real estate selling costs
  • Travelling to the new place – Transportation and storage of household items, Travel costs, meals, and lodging.
  • Temporary living expenses of up to 15 days till your new house is ready.

If you moved for personal reasons or because you shifted to remote work, you are not eligible for deductions.

Things to Keep in Mind When Moving Within Canada

When moving to a new province, you might want to update your checklist with the following things to ensure a smooth transition:

  • Connect with a professional accountant to check your tax residency.
  • Update your address with the CRA by logging into My CRA Account.
  • Update your address in your employer’s payroll and personal documents such as driver’s licence and vehicle registration.
  • Establish new residential ties by opening new bank accounts, connecting utilities in your name, and joining local organizations to strengthen your residency status.
  • Check eligibility for moving expense deductions and save all the receipts.
  • Check provincial credits for your new province.

Make sure to do all the above before December 31.

Contact Glenn Graydon Wright LLP in Oakville to Help You File Your Tax Returns Accurately

Talk to a professional accountant to help you stay compliant with provincial taxes and plan your move between provinces. At Glenn Graydon Wright LLP, our accountants and tax consultants can help you file your taxes and claim deductions compliantly. To learn more about how Glenn Graydon Wright LLP can provide you with the best accounting and tax advisory services, give us a call today at 905-845-6633 or connect with us online to schedule an initial consultation.