Home Relocation Loan

Rules of Application

• All of the following criteria must be met:
• Employee moves from a residence in Canada to start new work within Canada.
• Loan used to buy new home that is at least 40 km closer to the new work location.
• Employee or employee’s spouse/common-law partner receives the loan by virtue of the employee’s employment.
• Loan is designated to be a home relocation loan.
• If the term of repayment for the home relocation loan is more than five years, the balance owing at the end of five years is considered a new loan for the purposes of computing the benefit.
• A deduction is allowed to be claimed by the individual in the first five years of the loan.

Computation of Benefit

• Outstanding loan x prescribed interest rate = taxable benefit.
• Reduce by any amount paid by the employee.
• The prescribed interest rate cannot exceed the interest rate at the time the loan originated.
• Less: deduction in the first five years of the loan, equal to the lesser of:
• Taxable benefit; and
• Interest calculated on a loan of $25,000.