Buying a Cottage
Living The Cottage Life
A home away from home, a vacation getaway or a retirement sanctuary – your second property can fulfil your recreational dreams. But turning those dreams into reality takes some thoughtful planning on the part of would-be cottage owners.
Buying A Second Property
If you're at the stage where you're looking to purchase a cottage, you need to take a look at your finances to see how this second property fits into your current situation. Most people will opt to purchase the cottage using a combination of a down payment and a mortgage to finance the outstanding portion. Saving to buy a cottage is like any other savings plan you undertake for a major purchase. As part of your plan, you can choose a variety of investments to help you save toward it. Once you have purchased your property, your investing plan can continue and now help you to keep up your mortgage payments.
Keeping The Cottage In The Family
Once you own your cottage, your concerns may shift to keeping the cottage in your family. Under current tax laws, a cottage that is not used as a principal residence by the owner is considered a capital asset. That means that in the year the cottage is sold or transferred to someone other than your spouse, or on the death of the surviving spouse, it is subject to capital gains tax, provided the property has increased in value. Life insurance may be an effective solution to fund the tax liability upon transfer of the cottage to your heirs.
Explore Your Options
No matter if you are beginning to save for a cottage or if you are looking at methods of keeping it in your family, your CIBC Wood Gundy Investment Advisor can provide the expertise you need. To find out how we can help you, use our Find An AdvisorOpens a new window in your browser. tool to locate a CIBC Wood Gundy Investment Advisor near you.