Here are two ways to reduce an estate’s tax liability related to your cottage, cabin or chalet.
Transferring a vacation property during your lifetime
Say you own a vacation property that you intend to hand down to your children. You could cover the capital gains tax liability today, but you worry about your estate facing an overwhelming tax bill as the property value escalates over the years.
In such a case, you may consider selling or gifting the property to your children now. You pay the tax when it’s manageable, and future growth in the property’s value accrues to your children.
Choosing your principal residence
Even though the term is principal residence, a vacation property is eligible for the principal residence exemption even if you, your spouse or your child stays in the property for only a short time during the year. Say you own a home and a vacation property upon your passing, and the vacation property has appreciated more than the home. Your executor or liquidator can designate the vacation property as the principal residence, exempting the property from tax. The home will now be subject to tax on capital gains, but your estate’s tax liability will be reduced. Note that either property can be designated as the principal residence for different years.
This article is excerpted from the Well‑Advised Winter 2026 Newsletter and published on behalf of your financial advisor for clients residing in jurisdictions where they are registered. This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with applicable insurance regulators. In considering any particular investment, please remember that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided herein are subject to change without notice. Neither CI Assante Wealth Management Ltd. their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever in respect of the use of this material. CI Assante Wealth Management is a registered business name of Assante Wealth Management (Canada) Ltd. CI Assante Wealth Management Ltd is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. © 2026 CI Assante Wealth Management. All rights reserved.