The family cottage isn’t just property—it’s memories, milestones, and legacy. But without the right plan, it can quickly become a major tax burden for the next generation.
Here’s how to protect what matters most—your family, your memories, and your legacy.
01
WHAT’S AT STAKE
CRA treats it like a sale at fair market value.
When a cottage passes to your heirs, CRA treats it like a sale at fair market value. That means potentially huge capital gains taxes your family may not be prepared for.
Massive capital gains tax bills at death
Forced sales of cherished family property
Unexpected financial burdens on loved ones
02
CONSIDER THIS EXAMPLE
A $125,000 tax bill at the owner’s passing.
CONSIDER THIS EXAMPLE
Cottage originally purchased
$200,000
Current market value
$1.2 million
Capital gain
$1 million
Taxable gain (50% inclusion)
$500,000
Taxes due (e.g., ~25% rate)
$125,000
The result
That’s a tax bill that must be paid at the owner’s passing—potentially forcing your family to sell the cottage just to pay CRA.
The Good News?
With proactive planning, there are proven ways to protect your cottage and ensure it remains in your family for generations—without the tax hit.
03
KEY STRATEGIES
Key Strategies to Protect Your Cottage
01
Principal Residence Exemption (PRE)
Can reduce or eliminate capital gains if it qualifies as your principal residence.
02
Family Trust
Can freeze the cottage value, allocating future gains to beneficiaries and reducing future tax.
03
Joint Ownership & Gifting
Gradually transferring ownership during your lifetime to spread tax obligations.
04
Life Insurance Solution
Use insurance proceeds to cover capital gains tax at death—preserving your cottage for family.
05
Buy-Sell Agreements
Clear structure for ownership transfers within the family.
04
OUR APPROACH
You built your cottage around family moments—not CRA tax calculations.
We help you create a customized plan to:
Reduce capital gains exposure
Secure liquidity to pay future taxes
Keep your cottage in the family for generations
Take Action—Protect Your Family Legacy
Don’t let taxes and poor planning jeopardize your family’s special place. Let’s create a plan that protects your cottage for the next generation—and the next after that.
