Capital gains changes spur cottage market ‘anxiety.’ Will owners rush to sell?

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Capital Gains News

Budget 2024,Cottage Market,RE/MAX Canada

Owners in Canada's cottage market are grappling with changes proposed in the 2024 federal budget that could affect taxes on capital gains. Here's how the market could react.

After seeing a slight drop in prices last year, a new Royal LePage report is forecasting prices in Canada's cottage and cabin market to increase this year.

This is also the time of year when many cottage owners are in clean-up mode after the winter, tidying up their property, removing downed trees and getting ready for the summer season.The timing of the budget’s release means that sellers will be under “immense pressure and strain” to get a property cleaned and listed to facilitate a quick enough sale, Alexander says.Mark Pedlar, broker with Re/Max Bluewater Realty in Grand Bend, Ont.

Pedlar says at the end of the day, “no one likes paying more taxes,” but it’s unlikely to drive a surge in listings. He’s been telling clients that if they can sell quickly for the price they want ahead of the June 25 date, that’s great, but he doesn’t see it fundamentally changing the equation for most sellers in the market today.

“If you are passing your cottage on to a family member, I would actually encourage you to do that before the 25th, because it’s going to mean a lot of extra expense if you don’t,” Alexander says.On Tuesday, Re/Max released its 2024 Cottage Trends Report projecting that nearly two thirds of cottage owners surveyed are planning to hold onto their properties in 2024.

Amid an ongoing lack of inventory in cottage country, Re/Max is projecting a 6.8 per cent hike in average sale prices in 2024.

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