Navigating the Emotional and Financial Aspects of Inheriting a Family Cottage or Cabin

Inheriting a cottage is a gift full of memories, meaning, and family legacy for some Canadians. To others, it’s a double-edged sword. A financial choice and difficult decisions come along with choosing whether to keep or sell the cottage or cabin.

According to the 2025 REMAX Canadian Cabin & Cottage Trends Report, eight per cent of Canadians have inherited a cottage and intend to keep it. According to Chartered Professional Accountants Canada, there will be a $1 trillion transfer of wealth across Canada, a large portion from the Baby Boomers to other generations by 2026. With more families preparing to pass recreational properties on to younger generations, the question is: What’s next? Let’s talk about the financial and emotional side of inheriting a cottage and how it could impact your family and future.

The Emotional Factor: Selling or Holding On 

To the average owner, a cottage is not just a property but a place where family memories are made, milestones are met, and summer traditions are carried on. Whether or not to keep a family cottage, then, is not only a financial decision but an emotional one as well. There are arguments for both perspectives. Some find keeping the cottage akin to holding on to family heritage. Others find the financial or emotional burden is simply too heavy a load to bear. Because family members may not necessarily see eye to eye on exactly what they want to do with it, communication, legal advice and estate planning should be part of the conversation.

Can You Afford to Maintain the Cottage?

Financial Factors:

Owning a cottage involves a lot more than just memories. You’ll also incur the following ongoing expenses, among others:

• Property taxes
• Home insurance
• Utilities (electricity, propane, septic maintenance)
• Repairs and seasonal maintenance

These expenses accumulate, particularly for those who are keeping a primary home as well.

What Tax Consequences Do You Need to Know About

Inheriting property in Canada has its tax consequences. You don’t pay an inheritance tax, but you’ll most likely be required to pay capital gains tax. It is “sold” at the date of death at fair market value when inheriting. If the cottage is not your primary residence, you’ll pay for the value since your parents or other family members originally purchased it. Your best option is to sit down with a financial planner or a tax consultant to determine what applies to you.

Can You Afford to Inherit a Cottage?

Paying for a cottage is not only a question of making the monthly payments. You must also plan for long-term costs. Will the roof be due for replacement in five years? Is there a hidden plumbing or septic issue? How do you plan to take care of the property if you do not live nearby? Some families rent out the cottage to offset some expenses. Others share duties with siblings or create a formal arrangement for ownership, usage, upkeep, and cost. Before deciding whether to keep the cottage, establish a realistic budget and plan.

Passing Down the Cottage: Estate Planning and Succession

After you inherit the cottage, the question is what to do next. Do you give it to your children? Do they even want it?

REMAX’s 2025 Canadian Cabin & Cottage Trends Report reveals that 17 per cent of cottage owners say the next generation is not interested in keeping the cottage, and another 17 per cent plan on selling as part of an estate sale. To avoid confusion and disagreement, have an estate plan in hand that may involve:

• Naming future owners in a will or trust
• Establishing a maintenance fund
• Explaining how shared ownership would operate within family members

It’s a good idea to consult an estate planner and lawyer, to help you avert surprises in the future.

Preparing the Cottage for the Future: What to Do Even Before You Inherit

When you expect to inherit a cottage soon, get ready early.

Take the following steps:

• Conduct an inspection to establish the state of the property
• Discuss long-term plans with loved ones
• Prepare legal documents and register titles for land
• Research the neighbourhood around the cottage, zoning regulations, and future development

A cottage inheritance is a blessing but it can also be a burden if planning is not done correctly. When nearing the end of the planning stage, call on a local estate agent who will be on hand when needed.

You may consider your emotions, but a wise choice is balanced with the financial side of the equation. To make the most informed choice that is respectful of your family’s wishes, you should plan, be honest and open about communication, and seek professional advice. Planning is required, whether the choice is to keep the cottage, sell the cottage, or pass the cottage on to the next generation.