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i mlmll521'l5-‘Amml- 19 i ° 1 r Ensure your cottage hand - off goes as smooth as possnb e l he hand~oli It's the simplest result in double Milan). " I play in a football coach‘s play- . _ if you sell the cottage for fair book. \ l l it J market value, make the payments i But as any sports fan knows, even \ ll ) \ ' \ receivable over a five year period , the simplest play can go wrong for and Claim the capital pins resolve. any number of reasons. The same so that only 20 per cent tithe capltfl couldbetrueofyourfamilycottage ‘ galnlstaxablelnanyoneyear. hand-off. f « Regardless of whether you gift it has been in your hands for or sell. consider whether the prin- years of fun times with the people cipal residence exemption should youlove. ' an beclaimedioralloraportionofthe . But,thedaywillcomeâ€"maybe nix yearstheootmgehasbeenosvned. .,, sooner,maybelaterâ€"â€"whenyouwill ' ‘~ '~-»_._ wanttohand-ofl‘yourcottagetooth- ? try-nu \\ ers.probahlyyouradultchlldren. Altematively,tnnsferthepropâ€" ' ‘, 5 ~ _. To help you avoid potential RUSS mytoamisawithyuirldassben- " - obstacleslikeemessive taxationand MCEACHNIE end-nos. , vwg 4 maybeevensomesurprisingopposi» Thistranaleroptionwlllalsotrig- 4“ . v1 ffâ€" .. non, here’s how to perform a cottage ger an immediate capital gain but fixfi-PQQQ; " , {a hand-of! that ensures it will stay in “mm future capital gains on the property your family’s hands for a long time. Plan now to manage potential tax will accrue to your children and are ' liabilities when you make the hand- not payable until they sell the prop» Call the fit play off. any. A successful hand-off starts with Unless you're passing assets to everyone on your 'team' being on a spouse or common-law partner. Innueyotsrhand-ofl side. when you die you're deemed to have Cover cottage capital gains â€" - Y Yes. your adult children have disposed ofyour capital assets at fair and other estate debts - with per- f 3- always enjoyed the cottage - but market value â€" meaning that ifyour manent life insurance. ’ " will they in the future when you're cottage property has appreciated, The death benefits are usually no longer around? your heirs could face significant tax tax-free and can provide an essen- . Talk to your children now and on capital gains realized. tial source of cash to pay taxes if there are those who do not want resulting on death so your family ' ownership responsibilities. you can Alcoa-taxing handâ€"off won’t be forced to sell assets, such as talk to your coaches â€" your profesâ€" McEachaie Group Private help avoid future family squabbles Transferthe property to your kids your cottage. sional and legal advisors â€" about Wealth Management. ContactRuss by ensuring they are treated fairly in while you are alive, either as an out- Of course, your cottage handâ€"off what's best foryour game plan. McEadmie, (TECPCA, CDFA, RRC, your will. right gift or by selling it to them at should be an essential part of your on Principal, ("SIS-8862360, at 6241 fair market value (selling for less can overall financial and estate plan. so This column ispmw‘dedby urge to ncsmcuChniecom ’~ ‘7rvifi \ i drop in home prices, which could be devastating when it - $5, ' .f' 7 7 \." . ‘ a" ‘ \. ‘ "Do these kinds of things typically end well? Usually not,‘ she i comes time to renew mortgages, regardless of interest rates. 5 as %E, v, . « J 1 says of the trend. Real estate prices in Cities Within proximity l, l ' ‘ fl“ , i; to Toronto and Vancouver are also going up, as homebuyers ‘ "That's where the real risks are,‘ she says. "That’s where ‘ - ~ \ i l‘ , \; gru‘fl .. l ‘ ‘ seek more affordable alternatives, but it's a phenomenon . getting advice from financial planners and an accredited ’ ‘. J 7 i . My isolated to only Ontario and BC, Cooper says. mortgage professional becomes really important .' 3 ' â€"\’““ ' ; 2 The overall Canadian economy is still struggling to recover 3 So far, afiordability is only a major issue in Vancouver, ’ 7 from the decline in oil prices. Cooper says that's the reason 1 Toronto and their neighbouring regions. A" at“ f a. the Bank of Canada will keep interest rates low. "The economy 1 «f l- is still underperforming and the Bank of Canada is likely not ‘ Prices in other parts of the country, Cooper says, are not “ ‘ going to be raising interest rates this year.’ rising as rapidly, while provinces affected by the drop in oil ' ', prices â€" Alberta, Newfoundland and western Saskatchewan, The issue on everybody's mind now, she says, is housing are experiencing house price declines. She", cooper: Homeowners Shonld affordability in both Toronto and Vancouver, where some i ' panic buying in the wake of the rising inflow of foreign 3 Ottawa, where sales are keeping pace with the housing Be M'ndful Of Changes in the "atket capital has pushed prices further up. ‘ supply, is ahowingno signs of either rapidly escalating prices By Gordon Hamilton or a migration of hornebuyers to the suburbs. The exodus of buyers to other BC. and Ontario locations An expected increase in US interest in search of affordable housing has driven up prices there In Montreal. the housing supply remains high, keeping ratc< may not be repeated in Canada as well. Canada Mortgage and Housing Corp. warns in its ‘ prices from escalating, while in the Halifax region, average this year says Sherry Cooper. chief most recent report on the Hamilton-Burlington region. ‘ prices varied by housing type and sub-region. Prices are up in economist for Dominion Lending for example, that there is evidence of overheating as Halifax City, but down in neighbouring Dartmouth. Centres Another year of low interest Torontonians are moving further afield. Prices. according rates means homeowners can defer to one indicator tracked by CMHC, were up 8 8 per cent in But returning back to the whole country, roughly 70 per cent worries about escalating mortgage 2015 and continue to be under substantial upward pressure. ‘ of Canadian household-s own their own home, says Cooper. payments, but even when rates do Similarly in BC. prices are rising in regions around Vancouver l and by far the majority enjoys a sufl'icient equity cushion to start to climb, Cooper expects the on M W ‘ as well as in Victoria. For example. house prices in Victoria ‘ withstand a temporary correction. increases will be moderate and a“ M for are reported to have risen a whopping 19 per cent year~overâ€" gradual “an M can.“ year in May. - Where homeowners should be evaluating risks, she says, is ‘ Even with interest rates at generational low levels. l | I l l | over the dramatic jump in real estate prices in Vancouver and homeowners with high household debt relative to their ‘ | ) l _ . \ Toronto, when foreign investment has been a factor driving income are heavily exposed to the risk of rising interest ; l l l ’ i I ‘ l ' l ' ‘ the markets Cooper believes there are real risks to home rates, a potential future market correction, not to mention ‘ equity if that investment pipeline is closed, even partially In a slowdown in economic activity that might jeopardize their i ‘m those redâ€"hot markets, some buyers are bidding above the ‘ ability to make mortgage payments. Cooper says A housing I | | | l ll (1 asking price in emotionally loaded bidding wars ‘ correction in these red-hot markets could cause a sudden l ' l