Get Your Free Cottage Capital Gains Tax Calculator Worksheet
Fall is definitely in the air. It’s pumpkin spice and hoodie season (which I love!). It’s dark when I wake up now (which I also love!) and the days are getting shorter (don’t love as much.).
Falling leaves and busy squirrels also means that if you own a three-season cottage, as we do in my family, it is time to start thinking about closing it up for the winter.
Cottages are magical places for the whole family and many Canadians are beginning to think about how they can keep the family cottage in the family. If that sounds like you, then that means that you will need to address the capital gains tax on your cottage.
You see, unlike your principal residence, which has a capital gains exemption, your family cottage does not have an exemption and the capital gains tax will need to be paid.
If you want to sell it, you will have to pay capital gains tax. If you want to keep it so your family can continue to enjoy it and make memories after you’re gone, you will need to plan for the capital gains tax and future upkeep.
You can either make a plan or your children and beneficiaries or neglect it and they will be forced to deal with it when you’re gone. And that could be a nasty surprise!
If your cottage has been a source of joy and happiness while you were here, don’t make it a source of conflict and pain for your family when you’re gone.
Whether you want to sell it or keep it, we have you covered. We can help you to figure out your cottage’s capital gains tax liability.
Get your free “Cottage Capital Gains Tax in Canada” Worksheet
Once you know what the capital gains tax liability is for your cottage, you can start making a plan. If you want to sell, you will know how much of the profit you will get to keep. If you want to keep it in the family, you can talk to your family and start making a plan the capital gains tax and future upkeep.
Keeping the Cottage in the Family is important to many Canadians:
Consider whether you wish to keep the cottage in the family and whether your children want to keep the cottage. Keeping the cottage in the family will help with your tax planning and help you take steps to ensure that your cherished property remains in the family for generations to come.
You need a plan for the capital gains tax on your cottage or your family will be forced to deal with it:
Paying capital gains tax can significantly reduce the value of the inheritance you leave to your loved ones. A family trust, an investment account set aside specifically for your cottage or a life insurance policy can be possible solutions to cover these costs. Talk to an advisor.
If you would like to discuss your cottage capital gains tax liability, you can book a FREE CALL with me.
I wish you and your family many seasons of joy and happiness at your cottage for as long as you wish for it.
With Gratitude,
KB Henry.
COTTAGE WORKSHEET
THIS ARTICLE IS PROVIDED AS A GENERAL SOURCE OF INFORMATION ONLY AND SHOULD NOT BE CONSIDERED TO BE PERSONAL INVESTMENT OR LEGAL ADVICE. READERS SHOULD CONSULT WITH THEIR FINANCIAL OR LEGAL ADVISOR TO ENSURE IT IS SUITABLE FOR THEIR CIRCUMSTANCES.