Inheriting Family Cabins in Canmore & Market Outlook!

Over the last few decades, many recreational buyers have looked to areas like Banff and Canmore as ideal places to invest in cabins/cottages. With such stunning landscapes and endless outdoor activities, it’s no secret why so many buyers chose these areas for their vacation properties. According to RE/MAX Canada, it’s projected that over the next three years, nearly 900,000 Baby Boomers will retire in Canada. At the same time, a much-awaited one trillion dollar transfer of wealth from Boomers to Gen X will continue. The majority of this wealth transference has to do with real estate changing hands from Boomers to Gen X. From vacation properties to primary residences, there’s a lot to know if you are going to become a beneficiary. 

In this article, we will be going over the Canmore cabin market outlook for 2023 and what to do if you will be inheriting cabins in Canmore! Follow along below to learn more. 

Cabins in Canmore –  Market Outlook 2023

In Canmore, the 2023 market projections indicate that sellers will have the upper hand. This is due to the low inventory in the area. It is told that these conditions will remain for the duration of 2023. The majority of buyers in this market are Boomers, Gen Xers and Millennials who are moving from within Alberta. 

In Canmore, the cottage and cabin market has seen an 8.2% increase since last year (2022) from $900,000 to $974,000. Furthermore, the average number of properties sold went down by nearly half (49.7% year-over-year) from 173 to 87. Despite this, the average sales prices are forecasted to increase by 8% for the remaining portion of the year. Most real estate professionals and Albertans are concerned about the low inventory, as this is expected to cause sales to decrease by 20% in 2023.

Canmore and Banff are not only popular among locals. In fact, these two towns have been known to draw in buyers from various international markets. However, now that Canada has put the foreign buyer ban into place, many international investors have been deterred. This is mostly due to the confusion surrounding the rules of the ban. 

Overall, the market in Canmore for recreational property is out of reach for many Canadians. With minimal inventory and a lack of affordable listings, Canmore’s market is catering to the 1 percent of Canadians who can afford the steep cost.

What to Know if You’re Expecting to Inherit a Family Cabin in Canmore?

Over the last few years, succession planning has become more and more popular. Put simply, succession planning is the act of arranging how people will inherit certain assets or roles within your family. Because so many Canadians are interested in succession planning, nearly half of all recreational property owners in Canada are holding onto their properties with the goal of passing them on to their family members. Moreover, those who are in the market for a recreational property have noted that the opportunity to pass it down to family is a large factor in wanting to buy. 

So, what happens if you’re next in line to inherit the family cabin? Will you be able to afford the cost of it? Is it worth it to sell the property? What about taxes? 

For many families, inheriting your family’s cabin/cottage will require being aware of taxable capital gain. Taxable capital gains are the part of your capital gain that you need to report as income on your income tax and benefit return. Below we’ve used data from RE/MAX Canada to outline the average price in Canmore’s recreational property market, the capital gains between 2016 and 2023, and what inheritors can expect to pay in capital gains tax. 

As we mentioned earlier in this article, the average price in Canmore in 2023 is $974,000. Along with this, the capital gain tax amount is $105,818, while the capital gain amount is $440,910. 

Contact us Today for More Information!

If you are planning on inheriting cabins in Canmore in the coming years, contact us today! We are happy to help you understand how your inheritance will affect your financial situation. Canmore is an incredible area to own a recreational property. Reach out today to learn more about all of the amazing opportunities that come with living in real estate in Canmore. For more information, feel free to message us with any questions or concerns you have about living in this great town. Be sure to check back next month for more real estate-related content and visit our social media page! We look forward to working with you in the near future!