How to properly give the cottage to your kids
Strategies for transferring cottages using sale structures and reserves to reduce immediate tax burden.
Summary of Tim Cestnick — The Globe and Mail (Tax Matters). The Globe and Mail. Read the original.
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What it covers
This column explains how a cottage can be transferred to children using a sale structure that allows parents to claim the capital-gains reserve. Cestnick describes how modest down payments and promissory notes can spread tax over several years while still achieving the goal of moving ownership to the next generation. He emphasizes the importance of documenting fair market value and clarifying expectations around ongoing use and costs.
Why it matters
Families often assume that gifting is simpler and cheaper, but a straightforward gift can trigger an immediate deemed disposition and large, unexpected tax bills.
Cottagr takeaway
Work with advisors to design a transfer that matches your family’s cash flow, succession goals, and tax realities, and document the resulting ownership and usage rules in Cottagr so everyone understands the new structure.
Summary of Tim Cestnick — The Globe and Mail (Tax Matters) — The Globe and Mail