Buying A Vacation Property - Things to Consider

Most people appreciate the value of a summer getaway up North or East. Enjoying the beauty of cottage country is part of Canadian culture. There are a number of factors to consider when purchasing a vacation property. Utilities When searching for a property, consider whether it is serviced with hydro and gas, sewer, water. If the property is serviced with utilities, keep in mind that utility fees will have to be paid along with the other expenses that come with owning a primary residence such as insurance and property taxes. Taxes Another factor to keep in mind is that unlike a principal residence, capital gains tax will apply to a purchase if it's a secondary property. When a vacation property is being sold, any appreciation in value is taxable. Also, any income generated through renting out the vacation property is also subject to tax. Additional Fees Additional fees such as garbage dump fees, septic tank cleaning and money for yearly maintenance should be included in the budget. If the vacation property will not be occupied throughout the year, it's also a great idea to budget for security features such as programmable lighting and alarm monitoring. Amenities Prior to purchasing a vacation property, it would be a good idea to spend time in the neighbourhood and locate the proximity to amenities such as gas stations, hospitals, grocery stores and sightseeing destinations in the area. Commute Consider how much time is needed to get to a chosen property and how to access it. While lake access may offer greater privacy and tranquility, year-round road access will generally appeal to more buyers. Another rule of thumb: the larger the lake, the larger a return on investment. ​ Reference: Toronto Real Estate Board