Canadian owners of a second home or vacation home can use guidance on selling the property. Aside from Canadian tax regulations, there are a number of considerations that can make selling a vacation home more challenging then selling a primary residence. Prior to getting a home ready for sale, learn more about where to effort in order to make selling a home an easier and more profitable process.
Take time to learn about specific concerns when selling a vacation property in Canada to avoid potential headaches and save money in the long-run.
Check for Restrictions
Canadian homeowners of condominiums or other homes in communities may need to check for any restrictions prior to listing a vacation home for sale. Stipulations may include selling a vacation property only during specific times of the year or to work within a company. Showing a home to interested buyers may be limited by such regulations or homeowners may be penalized by failing to attend to them. It is important to work within any community policies, in the Strathcona community or elsewhere, to make for a smoother experience when selling a vacation home.
Work with an Experienced Agent
Selling a vacation property is different than selling a primary residence. A local agent experienced in selling vacation property would know when it would be best to list and begin showing a property. The property should be listed during the busiest season to allow for more traffic and hopefully more offers on the home. The busy season may mean the winter or the summer, depending on the location and local attractions, such as a beach or ski town. In addition, a local agent can provide intimate knowledge of the community and any amenities or attractions to buyers.
Know the Surrounding Comps
Have an understanding of what buyers are looking for by reviewing comps, visiting other listed properties or talking with a local agent. This can make it easier when it comes time to price a property. While some may recommend listing at a higher asking price and then reducing it, other agents may suggest offering a lower asking price to attract multiple offers that can drive up the price on a desirable property. An agent generally has information about similar houses available in the area and can share that with sellers. A difference in pricing may be due to the number of bathrooms or specific updates to a property, such as new windows or new attic insulation.
Learn About Capital Gains Tax
There is much to understand about taxes on the sale of a vacation home in Canada. The payment of a capital gains tax is generally expected on the sale of a vacation property. However, there may be ways around it, such as alternating which property is the primary residence at the time of the sale. A tax agent may be able to assist when determining if this strategy would be possible in an owner's specific situation. Canadian homeowners who own a vacation home in the United States may need to deal with an obligatory withholding and need to pay U.S. taxes on the sale of that property. There are different considerations that come into play when Canadian vacation property owners sell a home in their home country or in another country.
Vacation property owners should be aware of how to best position their home for a quick and relatively painless sale. Speak with a local agent and a tax accountant to learn more about how to market a home and how to potentially save money on tax payments today.
By Justin Havre