Waterfront sales “Best year-to-date”

Sales of waterfront properties recorded through the MLS® system of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS®, declined by 14 per cent in October 2016, albeit from a record last October.

On a year-to-date basis waterfront sales were still up 11.8 per cent from the first nine months of 2015. This was the best first 10 months to any year on record.


“While waterfront property sales took a step down from last October they are still very strong, with much of that year-over-year decline simply reflecting the white hot pace of sales at this time last year when there were still many more properties for sale on the market,” said Mike Taylor, President of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS®. “Having said all that, the bigger picture is that 2016 will, in all likelihood, be the best year ever for sales in the Lakelands region.”

The median price for residential non-waterfront property sales was $250,000 in October 2016, up 9.6 per cent from October 2015. On a year-to-date basis the median price was running at $255,000, up 8.5 per cent from the first 10 months of 2015.

The median price for waterfront sales in October 2016 showed an increase of 13 per cent from October 2015. On a year-to-date basis the median price for waterfront property sales was up 9.5 per cent from the first 10 months of 2015.

The total value of waterfront sales was $101 million, an increase of 16.8 per cent from October of last year. This was the highest level for October on record and marked the first time volumes had ever surpassed $100 million in this month.

Includes transactions in all areas recorded by Muskoka Haliburton Orillia – The Lakelands Association of REALTORS®

musk_chart05_hi-res-1 musk_chart04_hi-res-1

Important information The area served by the more than 680 REALTORS® who belong to Muskoka Haliburton Orillia – The Lakelands Association of REALTORS® serving Muskoka, Haliburton and Orillia, is located less than a two-hour drive north of Toronto, in the heart of Canada’s Cottage Country. There are several major geographical areas within the Association’s boundaries, including the City of Orillia, Gravenhurst, Bracebridge, Muskoka Lakes, Huntsville, Almaguin Highlands, Lake of Bays and Haliburton. Each of these areas has a unique blend of properties ranging from residential homes in the City of Orillia and smaller towns to the rural areas in-between, as well as a mix of waterfront homes/cottages on the many rivers and lakes throughout our regions that range from the smaller entry level properties to the prestigious.

Succession Planning for the Muskoka Cottage


Nathalie Tinti, Partner

Barriston LLP

45 Ann Street

Bracebridge On P1L 2C1


The cottage is not simply a building of bricks and mortar. For most, the Muskoka cottage is

magical place that has been the silent spectator of wonderful memories over decades of family

interaction. A strong sentimental bond exists for most families to their Muskoka cottage and as

such, it is more than just an asset that needs to be considered in your estate planning. Many

people wish their Muskoka cottage to be passed down to generations long after their demise.

The transfer of a cottage property, as a gift or otherwise, must be careful considered as it can

result in unplanned tax and estate consequences.

Many aspects of the family dynamics should be considered when succession planning relating

to the family cottage, some of which are:

• How many children/grandchildren are involved in the planning

• Is there a difference in financial capacity of each beneficiary

• Is there a true interest in owning or the property, or are the beneficiaries indifferent

• Is there likely to be future conflict between siblings/relatives when they share not only

inheritance of the cottage, but also the costs associated with its maintenance and


• What are the tax implications relating to the disposition and who should pay them

• Who will be responsible for the ongoing ownership costs

• Proximity

• Marriage/Spousal interest

• Access to funds during your lifetime

• Timing

One you have carefully considered the issues relating to your specific family dynamics, the transfer of

ownership of the cottage may be something you wish to consider. The following are a few of the most

common options for ownership regarding succession planning of a cottage property:

1. Inter-vivos Trust

You may choose to transfer the cottage into a trust while you are still alive. On its basic level, this option

allows you separate the control and management of the cottage from its ownership. There are tax

implications on the transfer into the trust (deemed disposition). This does, however, avoid the necessity

of probate upon your death. A trust can also claim the principal residence designation on the eventual

sale. This should, however, be carefully considered as it may affect the ability of the beneficiaries of the

trust to claim this exemption elsewhere.

2. Sell the Cottage to you Children during your Lifetime

This may make good sense if you need the funds from the asset during your lifetime. You can also add a

life interest on title to the cottage to ensure that you are able to use the cottage during your lifetime.

3. Joint tenancy with Right of Survivorship (bare trustee)

This strategy allows the cottage to be transferred during your lifetime to one or more of your children,

as bare trustee/s only. If this option is chosen, there will be no tax consequences on the transfer. There

will also be no necessity for probate upon your death.

If you have determined that you would like the cottage to stay in the family and transfer to more than

one child, it is very important in order to avoid conflict in the future, that ownership terms are dictated

through a shared ownership agreement. If there is no shared ownership agreement, inevitably there

will be disagreement between multiple owners of the property as to how a property is managed. For

example, who determines what repairs are necessary and who is going to pay for them? Frequency of

use often becomes an issue, especially in Muskoka, as there is a relatively short summer season.

Perhaps most importantly, a shared ownership agreement will dictate the options and terms relating to

disposition and buyout.

The Need to Plan Early

Plan for the future as soon as possible. In order to gage your family’s interest in keeping the cottage,

you must have lengthy discussions with your children and their spouses. Tax considerations should be

discussed with your accountant and your lawyer. Eventually, the tax man must be paid. However, there

are many options available to either defer the tax or minimize it. Payment of tax should be a

consideration when conducting your estate planning. Planning ahead will give you time to speak with

your financial advisors and consider all of the options. Once all of the options are carefully considered,

you will be able to make a good decision that suits your specific needs.