Enough of COVID...what are you doing to the house?

[mimico_polak]

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2 questions: Did your parents ever own the cottage while not owning a house? Is the capital gain higher on there current house or the cottage?

1. No. Always as a cottage
2. No capital gain on house (bought in 1989 for 220k in Etobicoke) cottage was purchased for 75k back in 1995 / 6.

I expect it to be worth 450-500k max (if that).

It’s a 700sqft bungalow, old, all original interior with a teeny tiny bathroom and unfinished basement. On a 75 x 200ft yard 10min walk from Allenwood Beach).

 

[Mad Mike]

With KiTec its was a one hundred percent pipe problem , they decided it was a good idea to put an aluminum foil layer into the pipe manufacture . Add cheap brass fittings and galvanic corrosion ensues . You’ve made a bad version of a battery . I have four bathrooms and a kitchen , the gamble is does it leak at fifteen yrs , twenty or twenty five ? Cause nobody actually knows when , just that it eventually will .


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Not sure about that. I’ve replaced the stuff in a couple of places. The fittings are cheap brass with a high zinc content. The zinc corrodes away leaving a porous, brittle copper rich brass. The chemistry problem is de-zincing.

Kitec pipe can fail, but I’ve never seen that - just bad fittings. The pipes aluminum core is not in direct contact with brass, and there is no electrolyte between the fitting and pipes metal core. The poly part is not susceptible to chemical degradation.

Although replacing the fittings would remedy Kitec issues, no plumber or insurance go would touch that with a 100’ mast.

 

[Mad Mike]

To make things more complicated, you can theoretically pick and choose years for primary residence. For instance, house until 2016, cottage from 2017 until 2022, house after 2023. If you do that, cra allows a plus one year where capital gains on both are untaxed, consult your tax professional. You declare the pre years when you sell, I don't know if you can get retroactive assessments for the dates. That path could save tens of thousands in tax.

It’s not that simple unless you have very little gain on one of your places and a lot in another. The exemption is a straight line calculation based on years of residence, you don’t get to pick specific years, and you can’t have more years than you owned (except for +1).

 

[Mad Mike]

1. No. Always as a cottage
2. No capital gain on house (bought in 1989 for 220k in Etobicoke) cottage was purchased for 75k back in 1995 / 6.

I expect it to be worth 450-500k max (if that).

It’s a 700sqft bungalow, old, all original interior with a teeny tiny bathroom and unfinished basement. On a 75 x 200ft yard 10min walk from Allenwood Beach).

Your best bet is to put some effort into adjusting the cost base. Improvements count, repairs do not. New roof, well, siding, kitchen or bath Reno, landscaping, insulation, decks, driveways… yes.

Paint, repair a door, changing carpets, cutting grass, snow clearing, mortgage interest and property tax- no.

there are strategies for splitting years of ownership between house and cottage, but I’m assuming the house gain is substantially more in $$$, so that’s not gonna work for you. .

 

[mimico_polak]

Your best bet is to put some effort into adjusting the cost base. Improvements count, repairs do not. New roof, well, siding, kitchen or bath Reno, landscaping, insulation, decks, driveways… yes.

Paint, repair a door, changing carpets, cutting grass, snow clearing, mortgage interest and property tax- no.

there are strategies for splitting years of ownership between house and cottage, but I’m assuming the house gain is substantially more in $$$, so that’s not gonna work for you. .

Interesting. Since the time they bought it:

New roof, siding, insulation, floor, windows and 10k or more to connect to the city water and sewers in the late 90s or early 00s.

Obviously there aren’t any receipts considering the time frame.

 

[Mad Mike]

Interesting. Since the time they bought it:

New roof, siding, insulation, floor, windows and 10k or more to connect to the city water and sewers in the late 90s or early 00s.

Obviously there aren’t any receipts considering the time frame.

Photo evidence and fair valuations on work are generally acceptable.

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