Does Moving House Affect Your Tax Return?
Moving house can affect the practical side of managing your tax affairs, especially if you also change your job, start university, move interstate, begin working from home or start ABN work.
However, simply changing your home address does not automatically create a tax deduction.
The tax treatment depends on what the expense relates to and whether it satisfies the relevant Australian tax rules.
Removal and relocation expenses are generally not deductible to an employee simply because the person moves to take a new job or because their employer transfers them to another work location.
Are Removalist Costs Tax Deductible?
In ordinary circumstances, the cost of moving your household belongings from one home to another is a private expense.
This can include costs such as:
- removalist fees
- truck hire
- packing materials
- storage while moving
- moving furniture and household items
- cleaning your old or new residence
Moving closer to work or moving because you found a better job does not, by itself, convert these private costs into deductible work expenses.
What If You Move Because of a New Job?
This is one of the most common questions for Nepali workers who move between Australian cities.
For example, you might live in Sydney and receive a new employment opportunity in Melbourne.
Even though the reason for the move is employment, the cost of relocating your home is generally considered private rather than a normal work-related deduction.
Moving from Sydney to Melbourne for a new job
A Nepali worker living in Sydney accepts a new position in Melbourne. They pay for a removalist, flights, temporary accommodation and bond for a new rental property.
The move helps them take up the new job, but the ordinary cost of relocating their home is generally private rather than a deductible employee expense.
What If Your Employer Transfers You?
The same general principle can apply where an existing employer requires you to move.
For example, your employer may transfer you from Brisbane to Perth or from Sydney to a regional office.
A move being required by your employer does not automatically make your own relocation costs deductible.
What If Your Employer Pays the Moving Costs?
Sometimes employers assist employees with relocation.
They may pay a removalist directly, reimburse certain expenses or provide some form of relocation assistance.
The tax treatment of employer-paid relocation assistance can depend on how the arrangement is structured.
If your employer provides relocation support, keep the documents and check the treatment with payroll or a tax professional rather than assuming it should be claimed personally as a deduction.
Is Temporary Accommodation Deductible?
Temporary accommodation during a permanent relocation is generally different from accommodation required because you are travelling away from home in the course of your existing work.
If you stay in a hotel, Airbnb or short-term rental while relocating your residence, the expense may still be private.
The circumstances matter, particularly where genuine work travel is involved.
Can You Claim Travel to Your New City?
Travelling from your old home to establish yourself in a new location is generally connected with relocation rather than ordinary deductible work travel.
This should not be confused with travel undertaken in the course of performing your employment duties.
Relocation Travel
Travel undertaken to move your home to a new location is generally private.
Work Travel
Travel undertaken while actually performing work duties can be treated differently.
Normal Commute
Ordinary travel between home and a regular workplace is generally private.
Special Circumstances
Some work-travel situations have specific rules, so the facts should be checked carefully.
What About Driving Between Home and Work?
Moving further away from your workplace does not generally make your daily commute deductible.
Similarly, moving closer to your workplace does not create a deduction for previous commuting costs.
Ordinary travel between your home and your regular place of work is generally private.
Moving Interstate for Work
Many Nepali workers move between states for employment, study or lifestyle reasons.
Examples include:
- Sydney to Melbourne
- Melbourne to Brisbane
- Canberra to Sydney
- Adelaide to Perth
- capital city to regional Australia
The distance of the move does not itself change the basic tax treatment of ordinary relocation expenses.
Moving House as an International Student
International students commonly move because of university, rent costs, employment or changes in living arrangements.
Typical moving expenses such as bond, removalists, furniture transport, utilities setup and rent are generally private living costs rather than work-related deductions.
Students who also work should separately consider whether they have legitimate work-related expenses connected with earning their employment income.
What If You Move for University or Study?
Moving closer to university or another educational institution does not automatically make relocation costs deductible.
Self-education expenses have their own rules, and there generally needs to be an appropriate connection with your current income-earning activities.
Moving somewhere so you can begin a new course or change career does not automatically make the cost deductible.
Changing Your Address After Moving
After moving, it is important to keep your details current with relevant organisations.
Depending on your circumstances, this may include:
- your employer
- your bank
- your super fund
- myGov-linked services
- Australian government agencies
- your accountant or tax agent
Keeping your contact details current can help reduce delays and make sure important tax correspondence reaches you.
Moving and Working From Home
If you work from home, changing residences may affect your home-working records.
For example, you may need to keep separate records for work-from-home periods at your old and new residence.
The move itself is not automatically deductible, but eligible work-from-home expenses may still be considered under the normal rules.
Moving and Starting ABN Work
Some people move and begin self-employment or contracting at the same time.
It is important to separate private moving costs from genuine business expenses.
Simply registering an ABN does not turn your household relocation into a business deduction.
Moving Your Home and Business at the Same Time
A sole trader may sometimes relocate both their residence and business activities.
In these situations, the expenses may need to be separated carefully.
Costs connected with moving household belongings are different from costs genuinely incurred in relocating business assets or business operations.
The correct tax treatment depends on the facts and the type of expenditure.
Common Moving Expenses and General Tax Treatment
| Expense | General Consideration |
|---|---|
| Removalist costs | Generally private when relocating your home. |
| Moving truck hire | Generally private when used to move household belongings. |
| New rental bond | Generally a private housing expense. |
| Temporary accommodation | Often private where it is part of permanently relocating your residence. |
| Travel to relocate | Generally different from deductible travel performed in the course of work. |
| Daily commute after moving | Ordinary home-to-work travel is generally private. |
| Eligible work-from-home costs | May be considered separately under applicable working-from-home rules. |
| Business relocation costs | May require separate analysis depending on the business and expense. |
What Records Should You Keep?
Even where an expense is not deductible, keeping good records can still help you separate private costs from genuine work or business expenses.
Keep documents showing when you changed jobs or work locations.
Keep any relocation agreement, reimbursement or allowance records.
Separate genuine work travel from private relocation and commuting.
Keep relevant records for both your old and new residence where applicable.
If you operate a business, separate business relocation costs from household costs.
Common Mistakes After Moving House
- claiming removalist costs simply because the move was for work
- claiming new rent as a work expense
- claiming bond payments as a tax deduction
- claiming ordinary home-to-work travel
- mixing private relocation expenses with ABN expenses
- assuming an employer-requested move automatically creates a deduction
- failing to keep employer relocation documents
- forgetting to update contact details after moving
What If You Changed Jobs and Moved House Together?
This situation is very common.
You may move house, finish one job and start another within the same financial year.
Your tax return may still need to include income from both employers, even though the moving costs themselves are generally private.
Make sure all relevant income statements are checked before lodging.
What If You Move Closer to Work?
Moving closer to work may reduce your personal commuting costs, but the move itself does not normally become deductible because it makes employment more convenient.
Your choice of where to live is generally treated separately from expenses incurred while actually performing your employment duties.
What If You Move Further Away From Work?
Moving further away from your workplace generally does not make the additional daily travel deductible.
The increased commuting distance is usually still connected with your private choice of residence.
How Hamro Accountant Can Help
Hamro Accountant provides Australian tax and accounting support for Nepali workers, international students, sole traders, ABN holders and small businesses.
If you have moved during the financial year and also changed jobs, started ABN work, received employer relocation assistance or changed your work-from-home arrangement, reviewing everything together can help avoid incorrect claims.
The correct treatment depends on your individual circumstances.