A few weeks back we talked about how cottages are often subject to capital gains, usually because they are not the primary residence of the people selling it. I am not sure you would be the person who would advise a seller on all tax avoidance options that are available, as that might be a question that would be best asked of their accountant, but in discussions it might help to have some knowledge and background on different ideas. One option your client will consider is moving the cottage into joint ownership, this is simple enough, but it may trigger land transfer tax and may preclude the ability to set up a trust upon the death of one spouse. If the joint ownership is going to be with a child of the owner (often the case) it can be more convenient, but as we have discussed in the past, it opens up the cottage to any disputes from the child’s creditors or any of their marital / divorce property disputes. Another option is a sale to a beneficiary with a take back / vendor’s mortgage against the property.  If this property is sold /transferred to a non-arm’s length person, like a child of the owner, this does trigger capital gains, but it can be spread over 5 years, which can be very helpful. Also, though It’s a bit rare, but if a person thinks their cottage will appreciate faster than their principal residence then they can consider changing their principal residence from the city home to their cottage. Other options exist, like trusts in wills, co-owner agreements, and life insurance set ups, all of which you can list for your clients as issues and solutions to discuss with their tax professional.

**as always, every situation is different and laws can change, if you have doubts, call someone

It comes up a lot in discussion and it is one of those topics that might be tough to encapsulate in a concise discussion with a client out there in the field. So, I thought I might give it a try to help if ever you are asked. Inevitably your buyer clients will be buying title insurance along with the purchase of their new property and it is not free. Quite fairly, even though their lender contract will make this insurance mandatory, the clients may have questions. Firstly, the lender requires this title insurance purchase in lieu of a survey which people often used to have to buy back in the old days, so it is not that bad in comparison. As to what it gives the client, it essentially protects them from things that cannot normally be seen through the lawyer’s process of transferring title into their name and clearing all registered matters that are on title. These are unseen or hidden issues with title to a property that can crop up after closing and possession that would not normally be visible in the lead up to the property closing, using all available on-time searches. These can include things like an undisclosed spouse or partner coming back and claiming homestead rights in the home, someone claiming a trust interest in the property, a lien being registered after possession by an unpaid contractor, or any work order attached to the property by a government. It can protect against unpaid tax arrears or utility issues, or it can deal with permitting issues or encroachments of building which are problematic with the lot lines and setbacks. There are also less common issues like fraud, forgery or false witnessing that could come into play.  All good things to be protected against.

**as always, every situation is different and laws can change, if you have doubts, call someone