Selling an Inherited Cottage: What to Know When You’ve Inherited a Waterfront Property
Losing a loved one is never easy, and managing their estate can feel overwhelming—especially when it involves a family cottage. Beyond the emotional connection, selling a waterfront property brings unique considerations: shoreline regulations, septic systems, seasonal access, and understanding how probate and taxes come into play.
If you’ve inherited a cottage or are the executor of an estate that includes a recreational property, this step-by-step guide will help you understand what’s involved and how I, as your realtor, can help guide you through the process with confidence and care.
Step 1: Confirm Who Has the Authority to Sell
Before listing, it’s essential to confirm who legally has the right to sell the property.
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Executor or Estate Trustee: If the property is part of a Will, the executor named can act on behalf of the estate once probate is granted.
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No Will (Intestate): The court must appoint an estate trustee to handle the sale.
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Joint Ownership:
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Joint Tenancy: The surviving owner automatically becomes the sole owner.
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Tenants-in-Common: The deceased’s share becomes part of the estate and will require probate.
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It’s important to note that a Power of Attorney ends upon death. After that point, only the executor or estate trustee can sign documents related to the sale.
If probate hasn’t been finalized, you can often begin the valuation, preparation, and marketing process, but the sale should only close once the legal authority to sell is confirmed.
This is where I step in. I will coordinate with your lawyer and ensure all documentation and timelines align properly so there are no surprises down the road.
Step 2: Understand the Tax Implications
When someone passes away, the Canada Revenue Agency treats their assets, including cottages, as if they were sold on the date of death. This is known as a “deemed disposition.”
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Capital Gains: The difference between the property’s adjusted cost base and its fair market value at the date of death may result in capital gains tax.
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Principal Residence Exemption: If the cottage was the deceased’s principal residence for some or all of the ownership period, some or all of that gain may be exempt.
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Value Growth After Death: If the property increases in value between the date of death and the eventual sale, the estate will report that additional gain on its own tax return.
Because every situation is unique, I always recommend that my clients speak with their accountant or estate lawyer early to confirm any potential tax exposure and whether a Clearance Certificate will be needed before distributing proceeds.
While I’m not a tax professional, I can help connect you with trusted experts and coordinate timelines to ensure the real estate process runs smoothly alongside the estate’s legal and financial requirements.
Step 3: Gather Key Property Information
Waterfront buyers expect thorough documentation. Pulling this information together early makes the sale process smoother and helps avoid surprises later.
Key items to locate include:
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The original survey or reference plan
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Any permits for additions, decks, bunkies, or boathouses
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Septic records and pump-out history
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Well details or water source type (drilled, dug, or lake intake)
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Heating and fuel type (propane, oil, electric)
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Information on road maintenance fees, if on a private road
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Shoreline road allowance details—whether it’s owned or still open
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Electrical inspection reports or WETT certifications for wood stoves/fireplaces
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A full list of inclusions (boats, docks, lifts, furnishings, etc.)
If you don’t have complete information—common with inherited cottages—I’ll structure the listing in a way that allows buyers to complete their own inspections rather than relying on representations you can’t verify. This protects the estate while keeping buyers confident and engaged.
Step 4: Determine Market Value
Estate sales often require two valuations:
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Date of Death Value — for probate and tax purposes
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Current Market Value — for listing and pricing strategy
Waterfront properties vary widely depending on the lake, frontage, exposure, access, and condition. As your realtor, I provide a comprehensive comparative market analysis specific to your lake, including active, pending, and recent sold data so we can position your property correctly from the start.
If the sale occurs during a softer market, I’ll help you time the listing to align with high-demand seasonal windows when cottage buyers are most active—maximizing visibility and sale price potential.
Step 5: Preparing the Cottage for Sale
When a property has been part of a family for years, small details can make a big difference. My goal is to make the process easy for you while presenting the property in its best possible light.
Together, we’ll create a plan for:
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personal item removal and clean-out
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arranging any necessary septic or well servicing
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tidying outdoor areas and docks
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coordinating cleaning and light maintenance
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staging the space using neutral, warm décor that highlights the waterfront setting
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capturing professional photography, drone imagery, and video that bring the property’s story to life
Buyers of waterfront properties are motivated by emotion as much as logic—they want to see themselves enjoying the lifestyle. My marketing approach is built to showcase that feeling while maintaining the professionalism expected at this level of property.
Step 6: Navigating the Listing and Sale
Because the property is being sold by an estate, there are a few added layers to navigate.
This is where experience matters most.
I’ll ensure:
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All agreements are correctly signed by the authorized executor or estate trustee.
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Offers include the right conditional and irrevocable periods to protect the estate.
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Clauses are worded properly to limit the estate’s liability while still encouraging serious offers.
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The sale is structured “as-is, where-is,” while giving buyers the opportunity for inspections and due diligence.
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Closing timelines align with probate and seasonal accessibility.
My role is to anticipate potential hurdles before they become problems—keeping the process as stress-free as possible for you and your family.
Step 7: Managing Multiple Beneficiaries
When several family members are involved, decisions can become complex.
I act as your central point of communication, ensuring updates and decisions flow efficiently between the executor, beneficiaries, and legal team.
Before listing, I help establish a clear process for how offers will be reviewed and accepted, so everyone is informed and aligned.
My goal is always to manage the process objectively, respectfully, and transparently—so families can focus on what matters most.
Step 8: Closing the Sale
Once your property is sold firm, I’ll work closely with your lawyer to coordinate all remaining steps:
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Confirming probate status
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Managing trust deposits and closing documentation
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Handling utility and association account closures
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Providing final keys, dock access items, and manuals
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Ensuring smooth transfer of all agreed inclusions
After closing, your lawyer and accountant will handle any final tax filings or CRA clearance certificates required before the estate’s funds are distributed.
Step 9: Selling with Confidence and Compassion
Selling an inherited cottage isn’t just about completing a transaction—it’s about honouring a legacy and helping the next family begin theirs.
With my experience in waterfront real estate, I bring both professional expertise and a human approach to help you navigate this transition smoothly, respectfully, and successfully.
Final Thoughts
If you’ve recently inherited a waterfront property or are managing an estate sale, I can help guide you through every step—from valuation and marketing to paperwork and closing.
My experience spans lakefront properties across Haliburton, Muskoka, the Kawarthas, Bancroft, Simcoe, and Parry Sound, and I take pride in presenting each home with the care, strategy, and attention to detail it deserves.
Whether you’re ready to sell now or just beginning to explore your options, I’m here to help you make informed decisions with confidence.
