The family cottage has been the space where you’ve created so many incredible memories, and passing it down to the next generation might seem like a simple gesture and one that will keep those lovely family traditions going. But it can quickly become a financial nightmare if you don’t plan for it well.
There are the capital gains costs to consider (if you’ve had this vacation property for many generations, its value has skyrocketed over the years, not to mention the recent spike in market value since the onset of the pandemic). Also, don’t get lost reminiscing about fond memories of the cottage; as with many major family decisions, it can become wrought with drama since you’re managing so many different personalities and expectations.
This article from the Globe & Mail features expert advice from financial planners on how to best plan passing down a family vacation property. You would be smart to prepare in advance as part of your financial health plan, especially considering that keeping property within the family could be seen as more of a priority right now given that more and more older Canadians want to age in place post-pandemic.