3 things first-time cottage buyers need to know before purchasing property

Published: September 18, 2020

Small house with for sale sign, property for sale Photo by Pixelbliss/Shutterstock

Watch out for hidden taxes

Before signing the deed, do some research on the area’s tax laws—each province is different. For instance, in P.E.I., you have to pay a land transfer tax. “You get hit right off the top,” says Rocky Arsenault, a broker with Re/Max Harbourside Realty in Summerside. “If you’re buying a property for $200,000, the government takes $2,000, one per cent of the purchase.” And if you’re a non-resident, you have to pay about 30 per cent more than residents pay in property taxes.

In some areas of B.C., there’s a speculation tax. Non-resident owners (including those from other provinces) and satellite families (owners whose income is mostly earned outside of Canada) pay up to two per cent of a property’s assessed value. “In Vernon, where I’m from, we don’t have that. But in Kelowna, which is only a 40-minute drive from here, they have the tax,” says Anne Murphy, a real estate agent with the Sutton Group. “That’s a cost that people have to take into account.” 

Know what you want

Rob Serediuk, an agent with Chestnut Park in Haliburton, Ont., has received many deadpan stares after asking what kind of sun exposure a prospective buyer wants. “Do you want to be sitting in the shade at three o’clock in the afternoon?” 

Before you hire an agent, Serediuk advises researching different areas and figuring out priorities: privacy, location, winterized or not, swimming conditions, lake size. “If you’re not a big boater, do you really need a big lake?” he says. “What about five years from now, when your kids want to go tubing?”

Research property bylaws and zoning

Just because you have a grand vision for your cottage property doesn’t mean you can build it. Zoning and building bylaws vary. Manitoba, for instance, enforces buffer zones of 10 or 15 feet from your property line (depending on the property size), which limit where you can build. This bylaw is designed to protect ecologically sensitive areas, such as waterfronts, while ensuring your new deck isn’t kissing the back wall of your neighbour’s cottage. 

Even if you do have the space, some locations restrict what you’re allowed to build. In Ontario, certain municipalities have strict rules around accessory structures, such as bunkies. In the Township of the Archipelago, you’re allowed up to three structures on your property, while in Dysart et al., you’re only allowed two. Securing a building permit for accessory buildings is often dependent on the building’s size, its intended use, and the capacity of your septic system. 

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