We built our cottage many years ago and have lost the receipts for the building costs. Are we on the hook for the entire capital gains tax when we eventually sell?—Sandy Blackwell-Magee, via email
Unfortunately, “if you’re unable to support the cost of your cottage, you probably are on the hook,” says Karen Slezak, a tax partner with Crowe Soberman in Toronto. “The entire gain would be taxable.”
If you want to cover your bases in the event that you’re audited—if you’re a fan of being better safe than sorry—you do have some options.
“Even though it was a long time ago, the tradespeople that you hired may have duplicate receipts for the work done and supplies purchased on your behalf,” says Slezak. There’s no harm in reaching out to your contractors, and/or carpenters, plumbers, drywallers, roofers, electricians, etc., plus anyone who installed windows or doors, or air conditioning and heating units. (Ask everyone.) “Ideally, you’ll want receipts that show the costs for all the items purchased through them as well as the cost of labour they charged to install those items,” she says.
If you can’t get receipts, get the next best thing: “Go to your bank and credit card companies and try to obtain statements for the period when the cottage was being built,” says Slezak. “This support is not as strong as the actual receipts, but it still provides an indication of the amount you paid.”
Good luck! And psst: if you want additional advice about the capital gains tax (or other issues related to cottage succession), sign up for our free newsletter, Family Matters. For more info, check out cottagelife.com/newsletters.
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This article was originally published in the September/October 2025 issue of Cottage Life.
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