Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Technical Publications DivisionRulings Directorate J.F. OultonA.W. Larochelle A/Director
Attention: Milled Azzi
Opinion Letter - IT-178R3 Moving Expenses
This is in response to your memorandum of August 11, 1993 regarding the enquiry from the firm of XXXXXXXXXX in which they request an interpretation relating to the above interpretation bulletin and, in particular, clarification as to the deductibility of the items described paragraphs 12(f) and 13 of the bulletin.
In your proposed reply to XXXXXXXXXX and on which you have requested our comments you have advised him as follows:
"This is in reply to your letter dated June 29, 1993, wherein you requested our opinion on whether or not the fee paid by a purchaser to a buyer's agent, in the "Buyer/Agency" concept, would qualify as an eligible moving expense. Essentially, such a fee is paid to the buyer's agent (a real estate agent), for acting on behalf of the purchaser in acquiring a home.
Under paragraph 62(3)(e) of the Income Tax Act (the "Act"), moving expenses include the selling costs related to the sale of a taxpayer's old residence. On the other hand, under paragraph 62(3)(f) of the Act, the costs related to the purchase of a new residence which qualify as moving expenses include only legal fees, land transfer taxes and taxes on the registration of title (and only if the taxpayer or spouse is selling or has sold the taxpayer's old residence as a result of the move). Subsection 62(3) of the Act also specifies that, "for greater certainty", no other costs related to the acquisition of the new residence qualify as eligible moving expenses (see also paragraphs 12(f) and 13 of IT-178R3, Moving Expenses). Since the fees paid to a buyer's agent relate to the acquisition of a new residence and they are not included in paragraph 62(3)(f) of the Act, they do not qualify as moving expenses."
We confirm that your reply is technically correct and in accordance with our interpretation of the provision.
We trust our comments will be of assistance to you.
B.W. Dath DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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