There is an interesting article in the July issue of TaxMatters@EY (from Ernst & Young), including information about transferring the cottage to the next generation.
From the July Issue:
… A gift of property to a child is considered to be a fair market value disposition. And, although gains on the disposition of personal property are taxable, losses are denied. Fortunately, in the case of a cottage, some or all of the accrued gain can be sheltered from tax using the principal residence exemption – by designating the cottage as a principal residence for a selected number of years of ownership and occupation. Seasonal occupation is sufficient for a property to be considered a principal residence.
Sound interesting! See the calculations on their newsletter!
From the Email Newsletter:
Recap of the E&Y Newsletter…
* examines tax issues surrounding the transfer of a family vacation property to the next generation
* recent changes by the CRA around online university courses that have made a positive impact on this ever-growing trend of distance education in Canada.. and
* a recent Supreme Court of Canada decision on joint investment accounts
About the Principal residence Exemption .. read Neil McIntyre’s 8 quick facts about the principal residence exemption