It’s a part of our Canadian culture to want to get away from the city and escape to nature. Whether you’ve always wanted a cabin at the lake or a place of your own private chalet in a mountain ski town, there are some important things to consider.
Here are some things to consider when embarking on this type of project.
Will it be a family getaway, a vacation rental, or both?
It’s not uncommon for holiday homeowners to consider turning a portion or all their property into a vacation rental or renting the entire place out for some of the year. In some cases, you might be building a holiday home in a sought-after area to generate business soley as a vacation rental. It’s important to decide exactly how you plan on using the property before the building or renovation stage.
Here’s why:
Design purposes:
A home you are building primarily for yourself will be designed differently than a home you are planning to rent out. If it’s just for you, you can go nuts with your personal design taste, style and various décor. If it’s to host guests, you might want to stick to something more neutral, inviting and geared towards your target market.
Let’s think about your target market. If you’re trying to attract weekenders to stay at your ski resort condo, consider finishing that compliment a rustic and alpine style and design. Exposed timber, natural stone and a fireplace are good choices for this market, compared to a chic or modern design. On a more practical note, you might want to build in some specific features to accommodate that target market. Skiers will appreciate a warm and accessible place to store their skis and boots and dry out their outer wear, for example.
The layout is also an important thing to consider. If you are planning on renting out your property some of the time, you should build a second bedroom or even a second suite that you can lock away your personal items in when you are not there. Do you want to build or renovate the property to accommodate multiple guests in multiple suites? Deciding on living spaces and bedrooms depends on if you want to accommodate families or couples. Or if you’re building for yourself, you can choose the layout that best suits your needs.
Write off purposes:
If you are building the holiday home to be a primary business, or even a part-time vacation rental, then you are eligible for certain tax right offs. The Canada Revenue Agency will allow you to write off certain parts of the renovation and construction cost, property taxes, mortgage interest and even the cost of advertising your vacation rental. You can also write off the home’s insurance and a portion of the utilities.
If you are planning to rent out your place only a portion of the time, then you can only claim a portion of the taxes. You can learn more about tax deductions on rental properties and be sure to consult an accountant or tax professional before proceeding.
If your vacation home is just for your personal use, you won’t be able to write off these expenses.
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