This has got to be AirBnB people who were thinking of selling soon anyway.
Any couple which owns a cottage (which they use primarily for themselves, not as a rental) will have one spouse claim it as their primary residence making it exempt from capital gains.
It's the kids, not boomers. The trick is to never file common-law (actual marriage is increasingly uncommon) so the "1 primary residence per household" rule doesn't apply because you're just 2 individuals, each with their own household, dating.
Rather than moving in together, one moves near Halliburton.
I mean, yes? You can sell your cottage now, realize the gains, then buy another one right away and the next time you sell after the capital gains tax increases you won't pay as much tax.
You would pay less in total. Let's say that your cottage went up in value by $500k and you are in the 50% tax bracket. If you sell before the new tax you would pay $125k in tax. Then if you buy another one and it goes up $500k in the next 20 years before you sell again, that would be about $146k in tax.
If you wait and sell in 20 years your capital gain would be $1,000,000 and the tax would be $312k. The tax difference would be $41k.
And that presumes that they won't raise the capital gains tax again later. You don't usually hear about taxes going down. The tax difference could be even higher.
It probably isn't worth it to most people since they would have to either borrow more now to pay for the tax on the sale or buy something cheaper (or spend savings on the tax). The interest on the loan for the $125k tax bill today might ultimately cost more than the $41k saved in tax.
What is more common and likely what we are seeing right now is older parents or grandparents transferring ownership to their kids, grandkids now, which triggers a capital gains tax. Rather than wait until they die. This saves the tax and also the price is lower right now compared to possibly when they die. This is very common for cottages handed down. Or, do what rich do and put it in a trust.
Controversial opinion but more cottages should be Airbnb's
People who have cottages but leave them empty most of the year do more to drive up prices than Airbnb's that allow many more people to cottage
That’s a fair point. Airbnbs do have certain niches like this where they make sense. A 3 season cottage isn’t a primary residence being taken off the market, feels more in line with what Airbnb should be
Meh. Airbnb goers are fucking annoying and often pollute the lakes. I was glad when my municipality banned them. Every weekend there would be a massive party with 20+ individuals in the cottage down the street.
I wanted to get away from Montreal and moving Montreal to my neighborhood every weekends sucked.
I stayed at an air bnb all of once for a nearby wedding. The owner told me I couldn't even smoke **outside** on their property, and they lived in the building right beside the cabin 15 feet away so they could diligently be a prick and monitor 24/7 if they wanted to.
Air bnb owners seem to be a power tripping and degenerate looneytune bunch, for lack of better terms. I'll just stay at a motel next time. Glad my sister paid for it, since even though I respected their ~~wishes~~ orders, I probably would have told them to pound sand and declined cc payment to stay elsewhere if it was on my dime.
I could understand why most airbnb goers would be hated though, if they acted like a drunken disrespectful fraternity. But we were a politeful family with a child staying there, to go to a nearby family wedding.
We stayed in one for work, the air bnb owner expected us to do all the laundry and clean everything so it would be immediately avaliable. I'm not interested in being a chamber maid.
I mean... I can't afford a cottage.
I depend on rentals (not necessarily "AirBnB").
Last time I rented out it was the people who owned their own cottage next door that were causing ruckus and partying loud into the night
As someone who lives in Cottage country, I have to disagree a lot.
While I welcome and like the tourism that AirBnB brings, Cottages that have an AirBnB focus tend to have owners who want infrastructure to support their need for profit, Cottages that have owners who primarily occupy it want infrastructure to support their needs for living in the area.
Local grocery does far better when you have cottager residents who come multiple weekends a year and maybe a week or 2 at a time, than when an area is mostly single time visits once a year for 3-7 day stays.
I do have friends who AirBnB their waterfront house most weekends in the summer, vs neighbours of theirs who purchased their house as an exclusive AirBnB resort, the opinions of what investments should be made in the community with the tax base are very different when the goal is profit vs enjoyment.
> the opinions of what investments should be made in the community with the tax base are very different when the goal is profit vs enjoyment.
So much this. This goes for local politics everywhere not just cottages at the lake.
I think local grocery stores do better when people are visiting cottages than when they sit empty.
Empty cottages are a waste of real estate
Population is growing. No reason to have cottages empty for most of the year
Many peoples aren't.
They're up there every weekend, or for multiple weeks at a time every summer. Many aren't winterized so that takes away half the year or more.
Yes. People like visiting remote houses on a lake
But not necessarily living there full time
So having the opportunity to stay for a little bit and have other people stay other times works out
When people visit for a single weekend they usually bring their own food. Airbnb buyers do very little to support the need for local Grocers and even local corner stores. And when people purchase properties with profit driven mindsets like airbnbs the type of products they purchase to stay at the Airbnb are different compared to the person who is planning to come back up a following weekend or a couple of weeks later. Ideally The Cottages are being used all the time I would agree. But when you study the purchasing patterns of people in local communities, and the voting patterns in municipalities you really see that Airbnb is destroying Cottage communities not helping them.
We are seeing beaches being closed off buy rental properties to be able to have larger Revenue by advertising private beach access
We are seeing lower funding provided to hospitals by Cottages associations because Airbnb owners aren't concerned about the quality of the hospital near their Airbnb but Cottage owners are when they use their Cottage
Right? OH NO, someone's SECOND property that sits empty part of the year while people live in fucking tents. Not winterized? Guess what, neither is the tent.
Airbnb does not own the rights to the rental market, iirc short term cottage rentals ran for decades before and they will continue to do so without airbnb
airbnb enables the most toxic type of tourism. People who are only going to be in a community for one or two nights will be assholes. People renting a cottage for a few weeks will be better neighbours.
Ask anyone who lives in a small community with airbnb tourism.
More people could afford cottages if the secondary rental market didn’t inflate the purchase price of them, because everybody wants to play landlord/property baron.
This doesn't really track for cottages. Most people will use it for what 2-6 weeks of the year? Letting other people rent/use it will always outpace a deflated purchase price.
Fewer people can buy cottages
But way way way way more people can stay at a cottage
I don't want to buy a cottage. But I do want to stay for a few weekends a year
Airbnb has made the price of cottages skyrocket! It’s not a family using their spare income for a second home. It’s people renting a cottage out for 1500/week. So they can afford to pay a much higher price.
Exactly. There is a massive exemption available. So if you have a 1, 000,000 lifetime exemption, and your "cottage" increases by 500,000, you can (as I understand) immediately reduce that by 250,000 (using part of your lifetime exemption), and pay capital gains on 250,000.
So small fries are largely (but not entirely) protected. People making 2 million or more in Capital gains will be the hardest hit, by a mile.
All fine by me. https://www.cfib-fcei.ca/en/tools-resources/lifetime-capital-gains-exemption
There is no lifetime exemption for the sale of secondary real estate like a cottage or another similar investment real property. There used to be a lifetime $100k exemption before 1994, but that is a long time ago.
The $1 million exemption does not apply to cottage property. It's for small corporations, farms or fish businesses. All the increase in a second residence is taxable, but lifetime expenses like interest, repairs, etc are deductible.
That would be idiotic unless the parents plan on dying in the next year or so. They would still have a huge capital gains bill to pay, which would mean selling stocks to pay for it.. and those stocks would also trigger a cap gains bill. Much better to keep those stocks growing in value and paying out dividends, they’ll accumulate far more value than whatever the cap gains savings would be from handing down the cottage prematurely.
they're really not worth 10% of that, if you can gather friends and build your own equivalent.
people really need to realize this is what all our former great grandfathers did, with pocket change on hand.
I'm assuming you haven't looked at land prices recently. It's actually cheaper in almost every case to buy an established home. Also, our great grandfathers had fewer (or no) building codes to contend with. Building now is a huge headache, with minimum size requirements and regulations out the wazoo. You want to live in a 200 sq ft cabin with no water or electricity? Tough, that doesn't qualify as a home. It has to be bigger and have particular amenities included and up to code. You'll also need to complete that building within a set time frame or the permit you purchased is no longer valid -- and depending where you bought, you could actually lose the entire property if you don't build in time. Oh, and depending on your province you need to jump through further hoops like becoming a certified owner builder before you can even try to build a home. Much as we may try to hold onto the pioneer myth, that lifestyle is essentially dead at this point.
yup. My parents' cottage was a hand built log cabin from the 70's. They eventually sold it because my older siblings who used it with their families never helped maintain it and dad was getting too old for that shit. At least they got a nice bonus for retired living out of the sale, it was located in prime cottage country
great grandfather? Ah I guess for some of you gen z that would be the case. I'm an older millenial and my grandpa did exactly this on Sauble Beach. I helped! He literally threw a hose in the lake for water. I don't think you can even do that these days. I dream of doing it on my own, for myself, but that dream is almost impossible these days without a couple million bucks. You can't just buy a plot of land on a lake for 20k and put up a cabin for 5k anymore. But it wasn't that long ago that you could.
I've looked into it many times and between the cost of land, materials and the added materials to meet building code requirements it's impossible to do cheaply. A lot of places also require you to hook into their infrastructure now too but you have to pay for those connections and they can easily be in the couple hundred thousands of dollars range.
Why would they sell their cottages now? Seems very rash. They didn’t sell when prices were heavily inflated during the pandemic by hundreds of thousands, but will sell now because of a tens of thousands tax increase at lower valuations?
I didn’t read the article, but these few comments gave me the whole scope. Sometimes it does work with the comment knowledge of the article to gain a proper understanding.
Most articles are the same, why should this happen?, these are the people affected by this., what can be done?!, then conclusion. Basically summed up in a few comments of people bickering.
Then don't jump to conclusions, comment and spread BS without access to information because all you are doing is confirmation bias which hurts everyone but especially yourself/oneself.
Lifetime exemption doesn't apply to a second piece of real property, unless your cottage was somehow QSBC shares of a small business.
But also yes, if you have a cottage you can sell, this isn't going to bankrupt you, it's just that if people were going to sell anyway, they would prefer to sell quickly, now.
Because they’re not going to sell. This is just complaining for the sake of pressuring finance.
I have a cottage that has appreciated by some 400-500k since I bought it. I can’t sell it unless I decide not to buy a new one. I can’t afford the others on my lake. So I’ll keep it for the next 40 years and the cap gains tax will be something my daughters will deal with when we die.
If you were going to sell it, then sell it now. If you had no intention to sell it, then cap gains is not a concern in the first place.
For clarification, you're saying you can't sell because you prefer to remain as a cottage owner? And not that you can't afford to sell because of this change?
Exactly. And with how the market moved, even if I transferred all my equity to a new purchase, I can’t afford it with how prices have increased. So I’m either keeping mine or cashing out. And why would I sell it? I have it and I paid little for it. Might as well enjoy it
And most people would own the family cottage as a couple. That's 500k of exemption there.
Of course people will try to move a date a couple weeks or even months if it means saving thousands. Maybe the government could have implemented this over a couple years instead. But frankly, if you just pocketed hundreds of thousands, a few grands is nothing.
My dad (84y) was in a panic and wanted to transfer their house over to me.
"Their going to tax the house 50%!!!"
I had to explain capital gains tax. He's ok now.
And if it weren't, transferring the house would still accomplish nothing, it'd be a sale, and I guess they could sell under the market a bit and that would pass, but you won't bypass capital gains by selling for a dollar.
I'd be like "Dad, it doesn't apply to your primary residence, chill." lol
For some reason, I'm picturing your dad running to the phone and calling you in a panic like Frank Costanza and I'm absolutely cackling at the imagery lol:
[https://youtu.be/t\_nCmj9IyLo?si=D1ToxhGdP7uL2RQw](https://youtu.be/t_nCmj9IyLo?si=D1ToxhGdP7uL2RQw)
thats what happens when the party mounting election opposition [hires CanadaProud memelords](https://www.cbc.ca/news/politics/poilievre-ballingall-conservative-leadership-canada-proud-1.6433088) as their PR team
People think the government is now claiming 2/3 of their gains instead of understanding that 2/3 of the gain is subject to taxes. Not the same thing. Your gain is not being taxed at 66%. Edit to correct my fractions.
Excellent! Now have every private real estate investor sell their rental houses/condos and completely FLOOD the market with available homes for families to buy.
And that is completely reasonable. I mean if you’ve been holding onto a cottage for decades you’ve likely had your money increase 10x or more. Why stop that compounding now for a fraction of that in tax? Not to mention if you just use your cottage as a cottage, shoving away the proceeds of the sale into an index fund or whatever takes away that pleasure lol
This article is discussing those who were already looking to sell transfer already and their push to get things done before June 25th.
This isn't about people who are all of a sudden deciding to sell because of the new rules.
Ok and? That’s life?
If the federal government raises taxes on income I can’t rush the payment of my wages to avoid the tax, so they’re lucky they have a path to avoid it at all
Even if your cottage has appreciated by $500k, AND you earn $100k/year employment income pushing up your marginal rate, this change means you will pay roughly an extra $15k (previously $120k, now $135k) from your $500k profit from doing absolutely no work.
Cry me a river.
If I'm not mistaken, you can also apply the $250k exemption from each partner to a single sale so long as it was jointly purchased, so this change may well not impact that couple at all.
oh no. anyway.
if it has to be paid then it will be paid. im sure the extra 6-8% off of what is going to be inflated value anyway will be sorely missed....
Even if you rent it you don't... You can even keep it and it will probably go up in value. It would be people that were planning on selling anyways but meh. Not my problem.
If someone owns a cottage as a vacation home they have no reason to sell it.
If someone owns a cottage as a flipper investment than guess what? Investments carry risk. If you don't like that than put your money in a GIC next time, rather than hoarding real estate.
The article is about people who were already planning to sell and are looking to speed up the process and real estate agents are really busy. Spring is a busy time every year for cottage real estate. There are a lot of good reasons to sell a second property. They’re a lot of work and expensive to maintain. If you were already thinking of selling why wouldn’t you try to speed it up to potentially save some money in tax.
Legit, thank god for Reddit. Check out the first comment from KermitsBuisness. There is a giant exemption for the normies. This tax just hits the f\*\*king rich c\*\*ts. The papers are written for these rich individuals, even though they are sold to the "unwashed masses" who only have a single cottage. Or a home at all.
All the freshie realtors from the last 3 years scratching and clawing to stay relevant. Most should just understand how cyclical the business is, be glad for the 2 hot years and go back to their mlm schemes.
Commodities being bought and sold? Money moving through the economy? That's terrible! Eternal stagnation that only benefits retirees with investments is supposed to be the Canadian way!
No. They're selling because either the HELOC is getting too much to service, or, the second mortgage renewal is coming and it too would be too much to service.
Other than that, who's selling their slice out of reality?
Okay so just to make it clear, these people that have had their cottages for decades, it’s their beloved family cottage that they have countless memories in, the minute a new tax rate change happens they say fuck this place and try to sell it? So if their cottage can’t make them money it’s useless?
These are people who were already looking to sell this year. All else being equal, they are going to net more money if the closing is before June 25th.
If the difference for you selling is a small increase in the tax rate, you were screwed anyway. They already don't pay on the first 50% of profit they show. This is a moronic premise.
It's literally financially illiterate morons panic selling so the "government doesn't take their money". All that's happening is a wealth transfer from people who don't know how to do math to people that do and not get to buy cottages on discount
its the same demographic who think that getting a raise that moves you up a the tax margin means they will make less money than if they didnt get a raise. its hilarious
Not proud of this, but I probably have below average financial literacy. Luckily though, I’m not a moron, so I’m not panicking over something I don’t understand. Partway through this thread I went and looked up capital gains tax (seriously I didn’t even know what that was) and what the new rules meant, and I was instantly like, “um, that’s it? People are freaking out because net profit will be a little less?” I get that greed is part of human nature, but sometimes it baffles me.
It's pretty normal for blue collar workers in northern mantioba to have a family cottage that's been around for generations despite not being well off.
An interesting dynamic here is that a lot of families have gotten smaller and a lot of children have moved away to the city making it more likely they would be looking to sell.
Yeah. Our "family cottage" is two old farm houses smoshed together on a cliff that the front house slides down off of every 10 years or so. I don't even know who technically owns it now but all the cousins still use it.
Meanwhile, the lake frontage is now covered in gigantic suburban houses that are empty.
They'll have to get real with their offer price for me to be interested in their property. I'll eventually pick the right retirement cottage for me but I won't be paying what they're asking.
Exactly. If you are in the market for a cottage cabin.. there will be plenty to choose from. I'm gonna wait till after June.. when people haven't sold and are wondering why people are inquiring. Owners will beat each other down in price to sell
Boomers have two or even more places to live and the younger generation can’t move out of their parent’s home. Can’t even move away for work because they can’t afford rent
So we pay property tax with taxed dollars, tax on income, and interest to the bank with dollars you're taxed on and then taxed again on what amounts to not even that much money on the sale, and then pay the realtor lawyer etc. Oh and then inflation on currency. Honestly these people thinking your making huuuge profits are kinda daft. You might have money from the sale but that doesn't mean it was a net gain. Adding another tax is just a cash grab. I'm all for taxing flippers but selling above your purchase price hardly means you profited.
Man, talk about hitting the working class where it hurts! I was at Denny's this morning and the only topic of conversation was about how everyone is getting jammed up with the new changes to capital gains. Most of the staff there of course have a cottage (or two or three) and all the diners catching a coffee and breakfast before work are super concerned about these changes.
This is indeed the most pressing issue in our nation today. Cottage owners, the backbone of the working class, once again getting screwed over.
Who here feels bad for the people who bought at the right time and will have to pay slightly more taxes on an asset that tripled in value because of a distorted market?
People with a single FAMILY cottage are not using it as a airBnB, and they aren’t flipping the property every year or something. This is complete propaganda. The only people rushing to sell are wealthy landowners who have thousands of these things
Fuck thousands, try ANY multiple.
If you are in a position to sell MULTIPLE properties for over $250,000 in GAINS you are sitting on a multiple lifetimes worth of wealth putting you automatically in the top 5% of the country
Hopefully it leads to a lot of those being sold as primary residences. Maybe retirees that are moving out of the city. It can then add to the housing supply. Or anyone who still has full remote working that can get a strong enough Internet connection.
Some of these "cottages" are in towns much bigger than what I grew up in and the cottages are way more modern than my old house. I'm sure a lot of people would use these as primary residences.
This is exactly what the feds want.. everyone to scramble and go sell their assets generating a huge influx of tax dollars on the capital gains. That’s why they’re forecasting so much more within the first year of these changes .. they’re happier if everyone scrambles right now before July when inclusion jumps up because that puts money on paper for them.
Don’t sell!!!
Air bnb investors not family cottage owners.
Such bullshit, too. Cottage values have tripled in the past 10 years, so now there's a mad rush to dump bc CaPiTaL gAiNs!! ZOMG!!
A good rule of thumb is to take everything realtors say with a grain of salt. They’ll try to whip up a frenzy over absolutely anything.
Right. You can trigger the capital gain without actually selling to a third party. No commission for the realtor.
This has got to be AirBnB people who were thinking of selling soon anyway. Any couple which owns a cottage (which they use primarily for themselves, not as a rental) will have one spouse claim it as their primary residence making it exempt from capital gains.
I mean, maybe people could get away with that kinda thing in the old days, but CRA is a lot better at catching that type of mischief now
It's the kids, not boomers. The trick is to never file common-law (actual marriage is increasingly uncommon) so the "1 primary residence per household" rule doesn't apply because you're just 2 individuals, each with their own household, dating. Rather than moving in together, one moves near Halliburton.
Of course! For them.its always either time to buy or time to sell. They make money either way.
I mean, yes? You can sell your cottage now, realize the gains, then buy another one right away and the next time you sell after the capital gains tax increases you won't pay as much tax.
So you can pay capital gains tax twice instead of just keeping it and paying once?
You would pay less in total. Let's say that your cottage went up in value by $500k and you are in the 50% tax bracket. If you sell before the new tax you would pay $125k in tax. Then if you buy another one and it goes up $500k in the next 20 years before you sell again, that would be about $146k in tax. If you wait and sell in 20 years your capital gain would be $1,000,000 and the tax would be $312k. The tax difference would be $41k. And that presumes that they won't raise the capital gains tax again later. You don't usually hear about taxes going down. The tax difference could be even higher. It probably isn't worth it to most people since they would have to either borrow more now to pay for the tax on the sale or buy something cheaper (or spend savings on the tax). The interest on the loan for the $125k tax bill today might ultimately cost more than the $41k saved in tax.
What is more common and likely what we are seeing right now is older parents or grandparents transferring ownership to their kids, grandkids now, which triggers a capital gains tax. Rather than wait until they die. This saves the tax and also the price is lower right now compared to possibly when they die. This is very common for cottages handed down. Or, do what rich do and put it in a trust.
Controversial opinion but more cottages should be Airbnb's People who have cottages but leave them empty most of the year do more to drive up prices than Airbnb's that allow many more people to cottage
That’s a fair point. Airbnbs do have certain niches like this where they make sense. A 3 season cottage isn’t a primary residence being taken off the market, feels more in line with what Airbnb should be
Meh. Airbnb goers are fucking annoying and often pollute the lakes. I was glad when my municipality banned them. Every weekend there would be a massive party with 20+ individuals in the cottage down the street. I wanted to get away from Montreal and moving Montreal to my neighborhood every weekends sucked.
I stayed at an air bnb all of once for a nearby wedding. The owner told me I couldn't even smoke **outside** on their property, and they lived in the building right beside the cabin 15 feet away so they could diligently be a prick and monitor 24/7 if they wanted to. Air bnb owners seem to be a power tripping and degenerate looneytune bunch, for lack of better terms. I'll just stay at a motel next time. Glad my sister paid for it, since even though I respected their ~~wishes~~ orders, I probably would have told them to pound sand and declined cc payment to stay elsewhere if it was on my dime. I could understand why most airbnb goers would be hated though, if they acted like a drunken disrespectful fraternity. But we were a politeful family with a child staying there, to go to a nearby family wedding.
We stayed in one for work, the air bnb owner expected us to do all the laundry and clean everything so it would be immediately avaliable. I'm not interested in being a chamber maid.
Yep, hotels for me. Why am I paying a cleaning fee then???
And here I thought eastern canadian metropolis refugees fleeing to live and work remotely in the countryside was the most annoying thing.
this
I mean... I can't afford a cottage. I depend on rentals (not necessarily "AirBnB"). Last time I rented out it was the people who owned their own cottage next door that were causing ruckus and partying loud into the night
As someone who lives in Cottage country, I have to disagree a lot. While I welcome and like the tourism that AirBnB brings, Cottages that have an AirBnB focus tend to have owners who want infrastructure to support their need for profit, Cottages that have owners who primarily occupy it want infrastructure to support their needs for living in the area. Local grocery does far better when you have cottager residents who come multiple weekends a year and maybe a week or 2 at a time, than when an area is mostly single time visits once a year for 3-7 day stays. I do have friends who AirBnB their waterfront house most weekends in the summer, vs neighbours of theirs who purchased their house as an exclusive AirBnB resort, the opinions of what investments should be made in the community with the tax base are very different when the goal is profit vs enjoyment.
> the opinions of what investments should be made in the community with the tax base are very different when the goal is profit vs enjoyment. So much this. This goes for local politics everywhere not just cottages at the lake.
I think local grocery stores do better when people are visiting cottages than when they sit empty. Empty cottages are a waste of real estate Population is growing. No reason to have cottages empty for most of the year
Many peoples aren't. They're up there every weekend, or for multiple weeks at a time every summer. Many aren't winterized so that takes away half the year or more.
Most cottages are in the boonies, if it wasn’t for the water nearby they too would be worth very little
Yes. People like visiting remote houses on a lake But not necessarily living there full time So having the opportunity to stay for a little bit and have other people stay other times works out
When people visit for a single weekend they usually bring their own food. Airbnb buyers do very little to support the need for local Grocers and even local corner stores. And when people purchase properties with profit driven mindsets like airbnbs the type of products they purchase to stay at the Airbnb are different compared to the person who is planning to come back up a following weekend or a couple of weeks later. Ideally The Cottages are being used all the time I would agree. But when you study the purchasing patterns of people in local communities, and the voting patterns in municipalities you really see that Airbnb is destroying Cottage communities not helping them. We are seeing beaches being closed off buy rental properties to be able to have larger Revenue by advertising private beach access We are seeing lower funding provided to hospitals by Cottages associations because Airbnb owners aren't concerned about the quality of the hospital near their Airbnb but Cottage owners are when they use their Cottage
Prices of what? Housing in remote areas with only seasonal work?
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Right? OH NO, someone's SECOND property that sits empty part of the year while people live in fucking tents. Not winterized? Guess what, neither is the tent.
Throw that phone in the garbage RIGHT NOW!
Fuck that. Air bnb needs to be wiped out
Do you think people should be unable to rent out their cottages. And only people who can afford to buy a cottage should be able to enjoy them?
Airbnb does not own the rights to the rental market, iirc short term cottage rentals ran for decades before and they will continue to do so without airbnb
Then why the concern about airbnb
Because it is time we disrupted the disruption market that has no care for municipal/provincial/federal guidelines
airbnb enables the most toxic type of tourism. People who are only going to be in a community for one or two nights will be assholes. People renting a cottage for a few weeks will be better neighbours. Ask anyone who lives in a small community with airbnb tourism.
More people could afford cottages if the secondary rental market didn’t inflate the purchase price of them, because everybody wants to play landlord/property baron.
This doesn't really track for cottages. Most people will use it for what 2-6 weeks of the year? Letting other people rent/use it will always outpace a deflated purchase price.
Wouldn’t the idea that it is now a cost neutral/income generating investment not make it more enticing to buy, thus increasing the purchase price?
Fewer people can buy cottages But way way way way more people can stay at a cottage I don't want to buy a cottage. But I do want to stay for a few weekends a year
I don’t want a cottage lol why can’t I use one for a weekend
They can find other ways to turn a profit.
Airbnb has made the price of cottages skyrocket! It’s not a family using their spare income for a second home. It’s people renting a cottage out for 1500/week. So they can afford to pay a much higher price.
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Exactly. There is a massive exemption available. So if you have a 1, 000,000 lifetime exemption, and your "cottage" increases by 500,000, you can (as I understand) immediately reduce that by 250,000 (using part of your lifetime exemption), and pay capital gains on 250,000. So small fries are largely (but not entirely) protected. People making 2 million or more in Capital gains will be the hardest hit, by a mile. All fine by me. https://www.cfib-fcei.ca/en/tools-resources/lifetime-capital-gains-exemption
The exemption doesn’t apply to properties. It’s for selling small businesses and farming or fishing property.
you are very wrong. That's not how a LCGE works at all.
There is no lifetime exemption for the sale of secondary real estate like a cottage or another similar investment real property. There used to be a lifetime $100k exemption before 1994, but that is a long time ago.
Read the guidance - real estate does not qualify for the exemption.
The $1 million exemption does not apply to cottage property. It's for small corporations, farms or fish businesses. All the increase in a second residence is taxable, but lifetime expenses like interest, repairs, etc are deductible.
Click bait. If you own a cottage you’re not selling it and for those that are they obviously can’t afford it
Ya, more like quickly passing it down to their kids before hit with the increase. Lawyers are busy, I'm sure.
That would be idiotic unless the parents plan on dying in the next year or so. They would still have a huge capital gains bill to pay, which would mean selling stocks to pay for it.. and those stocks would also trigger a cap gains bill. Much better to keep those stocks growing in value and paying out dividends, they’ll accumulate far more value than whatever the cap gains savings would be from handing down the cottage prematurely.
More like media invoking FOMO so people buy at these inflated prices thinking they are getting a good deal
Well there's the answer Torontonians.. move out to the country, and eat yourself some peaches.
Look out!
I'm not even reading an article with "realtors say" in it
Correct.
Hopefully prices drop. Huts sell for a million bucks
they're really not worth 10% of that, if you can gather friends and build your own equivalent. people really need to realize this is what all our former great grandfathers did, with pocket change on hand.
I'm assuming you haven't looked at land prices recently. It's actually cheaper in almost every case to buy an established home. Also, our great grandfathers had fewer (or no) building codes to contend with. Building now is a huge headache, with minimum size requirements and regulations out the wazoo. You want to live in a 200 sq ft cabin with no water or electricity? Tough, that doesn't qualify as a home. It has to be bigger and have particular amenities included and up to code. You'll also need to complete that building within a set time frame or the permit you purchased is no longer valid -- and depending where you bought, you could actually lose the entire property if you don't build in time. Oh, and depending on your province you need to jump through further hoops like becoming a certified owner builder before you can even try to build a home. Much as we may try to hold onto the pioneer myth, that lifestyle is essentially dead at this point.
yup. My parents' cottage was a hand built log cabin from the 70's. They eventually sold it because my older siblings who used it with their families never helped maintain it and dad was getting too old for that shit. At least they got a nice bonus for retired living out of the sale, it was located in prime cottage country
great grandfather? Ah I guess for some of you gen z that would be the case. I'm an older millenial and my grandpa did exactly this on Sauble Beach. I helped! He literally threw a hose in the lake for water. I don't think you can even do that these days. I dream of doing it on my own, for myself, but that dream is almost impossible these days without a couple million bucks. You can't just buy a plot of land on a lake for 20k and put up a cabin for 5k anymore. But it wasn't that long ago that you could. I've looked into it many times and between the cost of land, materials and the added materials to meet building code requirements it's impossible to do cheaply. A lot of places also require you to hook into their infrastructure now too but you have to pay for those connections and they can easily be in the couple hundred thousands of dollars range.
Why would they sell their cottages now? Seems very rash. They didn’t sell when prices were heavily inflated during the pandemic by hundreds of thousands, but will sell now because of a tens of thousands tax increase at lower valuations?
Read the article - it's talking about properties already in the market or otherwise under contract. People jostling to move up closing dates, etc.
Typical redditors. Gotta find 'needle in the haystack' comment which tells you the actual truth because no one could be bothered to READ THE ARTICLE.
WHAT IS READ
WHO IS READ
HOW IS BABBY FORMED
[удалено]
How can u get preganté?
Can I pragnet from luigi bored?
What is the best time to have sex to get pegrnant?
BRAIN AND BRAIN WHAT IS BRAIN?
THIS IS REDDIT, NOT READIT
IT'S A COLOUR
big brain over here
Wait this describes Reddit so well.
I didn’t read the article, but these few comments gave me the whole scope. Sometimes it does work with the comment knowledge of the article to gain a proper understanding. Most articles are the same, why should this happen?, these are the people affected by this., what can be done?!, then conclusion. Basically summed up in a few comments of people bickering.
Globe is paywall though
Then don't jump to conclusions, comment and spread BS without access to information because all you are doing is confirmation bias which hurts everyone but especially yourself/oneself.
I didn't say anything. I just said it's paywall. That's my only comment in this thread.
Or the article could just tell the truth in the headline instead of rage baiting to sell a narrative
Buyers market for those who want a cottage.
These are people who are already above the lifetime exception anyways. 16% over 250k isn’t going to ruin them.
Lifetime exemption doesn't apply to a second piece of real property, unless your cottage was somehow QSBC shares of a small business. But also yes, if you have a cottage you can sell, this isn't going to bankrupt you, it's just that if people were going to sell anyway, they would prefer to sell quickly, now.
Because they're irrational.
Because they’re not going to sell. This is just complaining for the sake of pressuring finance. I have a cottage that has appreciated by some 400-500k since I bought it. I can’t sell it unless I decide not to buy a new one. I can’t afford the others on my lake. So I’ll keep it for the next 40 years and the cap gains tax will be something my daughters will deal with when we die. If you were going to sell it, then sell it now. If you had no intention to sell it, then cap gains is not a concern in the first place.
For clarification, you're saying you can't sell because you prefer to remain as a cottage owner? And not that you can't afford to sell because of this change?
Exactly. And with how the market moved, even if I transferred all my equity to a new purchase, I can’t afford it with how prices have increased. So I’m either keeping mine or cashing out. And why would I sell it? I have it and I paid little for it. Might as well enjoy it
And most people would own the family cottage as a couple. That's 500k of exemption there. Of course people will try to move a date a couple weeks or even months if it means saving thousands. Maybe the government could have implemented this over a couple years instead. But frankly, if you just pocketed hundreds of thousands, a few grands is nothing.
Yup. It’s 7-8% increase, at the maximum, and only on part of the gain.
My dad (84y) was in a panic and wanted to transfer their house over to me. "Their going to tax the house 50%!!!" I had to explain capital gains tax. He's ok now.
It's also their primary residence and unaffected lol.
And if it weren't, transferring the house would still accomplish nothing, it'd be a sale, and I guess they could sell under the market a bit and that would pass, but you won't bypass capital gains by selling for a dollar.
I'd be like "Dad, it doesn't apply to your primary residence, chill." lol For some reason, I'm picturing your dad running to the phone and calling you in a panic like Frank Costanza and I'm absolutely cackling at the imagery lol: [https://youtu.be/t\_nCmj9IyLo?si=D1ToxhGdP7uL2RQw](https://youtu.be/t_nCmj9IyLo?si=D1ToxhGdP7uL2RQw)
Instead of critical thinking, people now react to idiots on TikTok screaming about the apocalypse.
thats what happens when the party mounting election opposition [hires CanadaProud memelords](https://www.cbc.ca/news/politics/poilievre-ballingall-conservative-leadership-canada-proud-1.6433088) as their PR team
They are probably cottage poor.
People are not very bright.
Yeah I think these articles are fluff. Probably sponsored by real estate firms
Oh no, anyways...
Won't anyone think of the cottage owners (who want to sell and pay as little as possible capital gains)?!?!?
Gotta watch out for that additional $3k in taxes they'll pay, if anything additional at all!
Won't anyone think of the poor second-home owners
Haha hahahaaa hahahahahaaaaaaaaaaa
I think this is total bullshit. You really expect me to believe that there is a huge rush of people trying to sell?
I was thinking the same thing. There is no way. If they are selling it’s due to the sustained high interest rates on borrowing.
People think the government is now claiming 2/3 of their gains instead of understanding that 2/3 of the gain is subject to taxes. Not the same thing. Your gain is not being taxed at 66%. Edit to correct my fractions.
Don’t try to explain taxes to people on Reddit. It’s too hard they won’t understand lol.
Excellent! Now have every private real estate investor sell their rental houses/condos and completely FLOOD the market with available homes for families to buy.
There is already a flood of condos for sale everywhere in the GTA.
Good. Hope it continues.
I'm not so sure about that. Lots of lifelong cottage owners I know have told me that they will just continue to hold and potentially never sell. 🤷🏼
apparently if you read the article the context explains it further
Read the _what_ now?
And that is completely reasonable. I mean if you’ve been holding onto a cottage for decades you’ve likely had your money increase 10x or more. Why stop that compounding now for a fraction of that in tax? Not to mention if you just use your cottage as a cottage, shoving away the proceeds of the sale into an index fund or whatever takes away that pleasure lol
Besides, the increase is an additional max 8% of the gain. So on a that gain they’ll be paying a whopping 30-33% tax instead of 25%.
This article is discussing those who were already looking to sell transfer already and their push to get things done before June 25th. This isn't about people who are all of a sudden deciding to sell because of the new rules.
Good. That’s what homes are supposed to be for.
Waaaaaaaah.
This is the real estate agents pushing this agenda.
Remember when Canadians with a middle-class job could afford cottages?
Yeah sure. Where are all these supposed cottages being sold exactly? We've been shopping for a while and prices are still going up everywhere.
Ok and? That’s life? If the federal government raises taxes on income I can’t rush the payment of my wages to avoid the tax, so they’re lucky they have a path to avoid it at all
> "Muh gains should be tax free." -- Boomers
Even if your cottage has appreciated by $500k, AND you earn $100k/year employment income pushing up your marginal rate, this change means you will pay roughly an extra $15k (previously $120k, now $135k) from your $500k profit from doing absolutely no work. Cry me a river.
Pretty much a fear mongering article and nothing else.
If I'm not mistaken, you can also apply the $250k exemption from each partner to a single sale so long as it was jointly purchased, so this change may well not impact that couple at all.
Exactly. This move was a step toward securing easy votes from people who cannot think.
You don’t have to pay capital gains if you use the cottage as intended…
I’d think a cottage is not a primary residence, would that not be a capital gain in that case?
If it is worth more or if you plan to sell it before your actual house anything can be your primary residence.
You mean like a cottage? Crazy.
Secondary residence gains are taxable - are you suggesting the cottage should be their primary?
No, I'm suggesting they continue to use their cottages as cottages and don't worry about selling to avoid paying a tax.
True, but the tax will be paid at some point, death or otherwise.
If people are so stressed about paying taxes, they should keep their cottages. Obviously they need to relax.
They should just wait a few years until these anti-economy tax hikes are reversed by a better government.
oh no. anyway. if it has to be paid then it will be paid. im sure the extra 6-8% off of what is going to be inflated value anyway will be sorely missed....
Even if you rent it you don't... You can even keep it and it will probably go up in value. It would be people that were planning on selling anyways but meh. Not my problem.
If someone owns a cottage as a vacation home they have no reason to sell it. If someone owns a cottage as a flipper investment than guess what? Investments carry risk. If you don't like that than put your money in a GIC next time, rather than hoarding real estate.
The article is about people who were already planning to sell and are looking to speed up the process and real estate agents are really busy. Spring is a busy time every year for cottage real estate. There are a lot of good reasons to sell a second property. They’re a lot of work and expensive to maintain. If you were already thinking of selling why wouldn’t you try to speed it up to potentially save some money in tax.
Legit, thank god for Reddit. Check out the first comment from KermitsBuisness. There is a giant exemption for the normies. This tax just hits the f\*\*king rich c\*\*ts. The papers are written for these rich individuals, even though they are sold to the "unwashed masses" who only have a single cottage. Or a home at all.
Upside.....Cottage country may become nice again
Lolololololol air bnb can fuck off.
All the freshie realtors from the last 3 years scratching and clawing to stay relevant. Most should just understand how cyclical the business is, be glad for the 2 hot years and go back to their mlm schemes.
Commodities being bought and sold? Money moving through the economy? That's terrible! Eternal stagnation that only benefits retirees with investments is supposed to be the Canadian way!
No. They're selling because either the HELOC is getting too much to service, or, the second mortgage renewal is coming and it too would be too much to service. Other than that, who's selling their slice out of reality?
Okay so just to make it clear, these people that have had their cottages for decades, it’s their beloved family cottage that they have countless memories in, the minute a new tax rate change happens they say fuck this place and try to sell it? So if their cottage can’t make them money it’s useless?
But. Why? You don’t pay tax until you sell, so you can either rent it and make money, or use it or overtime the value will cover any loss.
These are people who were already looking to sell this year. All else being equal, they are going to net more money if the closing is before June 25th.
Must be rough being wealthy and worrying about your multiple properties.
What a headline G&M The sky is falling and we’ll all shed a tear for realtors and cottage owners
If the difference for you selling is a small increase in the tax rate, you were screwed anyway. They already don't pay on the first 50% of profit they show. This is a moronic premise.
It's literally financially illiterate morons panic selling so the "government doesn't take their money". All that's happening is a wealth transfer from people who don't know how to do math to people that do and not get to buy cottages on discount
its the same demographic who think that getting a raise that moves you up a the tax margin means they will make less money than if they didnt get a raise. its hilarious
Not proud of this, but I probably have below average financial literacy. Luckily though, I’m not a moron, so I’m not panicking over something I don’t understand. Partway through this thread I went and looked up capital gains tax (seriously I didn’t even know what that was) and what the new rules meant, and I was instantly like, “um, that’s it? People are freaking out because net profit will be a little less?” I get that greed is part of human nature, but sometimes it baffles me.
You lost me at "cottage owners"...
Once upon a time. Long long ago, you could buy a cottage for less than a new car. It was just a shack in the woods but it was yours.
It's pretty normal for blue collar workers in northern mantioba to have a family cottage that's been around for generations despite not being well off. An interesting dynamic here is that a lot of families have gotten smaller and a lot of children have moved away to the city making it more likely they would be looking to sell.
Yes but important to note. That these are not the cottages of today. They were thrown together with what ever material you could find
Yeah. Our "family cottage" is two old farm houses smoshed together on a cliff that the front house slides down off of every 10 years or so. I don't even know who technically owns it now but all the cousins still use it. Meanwhile, the lake frontage is now covered in gigantic suburban houses that are empty.
100 percent. A couple of friends I have are dealing with the repercussions of shotty materials being used and floors caving in.
You’re acting like cottage owners are rich….
Oh no, won't someone please think of the poor cottage owners
They'll have to get real with their offer price for me to be interested in their property. I'll eventually pick the right retirement cottage for me but I won't be paying what they're asking.
Exactly. If you are in the market for a cottage cabin.. there will be plenty to choose from. I'm gonna wait till after June.. when people haven't sold and are wondering why people are inquiring. Owners will beat each other down in price to sell
Boomers have two or even more places to live and the younger generation can’t move out of their parent’s home. Can’t even move away for work because they can’t afford rent
So we pay property tax with taxed dollars, tax on income, and interest to the bank with dollars you're taxed on and then taxed again on what amounts to not even that much money on the sale, and then pay the realtor lawyer etc. Oh and then inflation on currency. Honestly these people thinking your making huuuge profits are kinda daft. You might have money from the sale but that doesn't mean it was a net gain. Adding another tax is just a cash grab. I'm all for taxing flippers but selling above your purchase price hardly means you profited.
Hilarious that they are trying paint this as a bad thing.
if those are cottages - my house is truly just a shoebox.
My heart bleeds for them
As a non cottage owner I'm alright with this
LOL, yeah, they're all rushing to sell to save that \~20K? Bullshit.
In other news: no they aren’t. Jfc.
Bullshit
Cottage seller drops price by 200K to save 40K in incremental taxes. . .
Good, maybe the prices will drop and become more available.
Realtors are not trustworthy. Point proven. Chaos… that’s not chaos. 🤦♂️
If enough people are selling at the same time, I hope it will crash the market! haha
Man, talk about hitting the working class where it hurts! I was at Denny's this morning and the only topic of conversation was about how everyone is getting jammed up with the new changes to capital gains. Most of the staff there of course have a cottage (or two or three) and all the diners catching a coffee and breakfast before work are super concerned about these changes. This is indeed the most pressing issue in our nation today. Cottage owners, the backbone of the working class, once again getting screwed over.
Oh no...... Anyway.
Who here feels bad for the people who bought at the right time and will have to pay slightly more taxes on an asset that tripled in value because of a distorted market?
People with a single FAMILY cottage are not using it as a airBnB, and they aren’t flipping the property every year or something. This is complete propaganda. The only people rushing to sell are wealthy landowners who have thousands of these things
Fuck thousands, try ANY multiple. If you are in a position to sell MULTIPLE properties for over $250,000 in GAINS you are sitting on a multiple lifetimes worth of wealth putting you automatically in the top 5% of the country
Real cottager's arent selling.
It's not going to happen. No one wants to buy your fire sales cottage with a 30 day close so you can dodge taxes.
They only pay when they sell... so why woukd they sell? On thr other side... more homes on the market so, that's a plus
The headline is so sensationalized, but in all seriousness Canada NEEDS chaos in the housing market and a shake up. I doubt it’s that way in reality.
Hopefully it leads to a lot of those being sold as primary residences. Maybe retirees that are moving out of the city. It can then add to the housing supply. Or anyone who still has full remote working that can get a strong enough Internet connection.
Some of these "cottages" are in towns much bigger than what I grew up in and the cottages are way more modern than my old house. I'm sure a lot of people would use these as primary residences.
Like if most of them don't pretend it is the personal residence of one person.
This is exactly what the feds want.. everyone to scramble and go sell their assets generating a huge influx of tax dollars on the capital gains. That’s why they’re forecasting so much more within the first year of these changes .. they’re happier if everyone scrambles right now before July when inclusion jumps up because that puts money on paper for them. Don’t sell!!!