Canada’s recreational property market is being pulled in several directions at once, as cross-border tax politics, estate-planning questions and broader affordability pressures all converge on the country’s cottages, lake houses and vacation homes.
One unexpected pressure point is coming from Florida. On Nov. 3, Florida voters will decide on Amendment 3, a constitutional property tax overhaul backed by Governor Ron DeSantis that would raise the state’s homestead exemption on non-school property taxes to US$150,000 in 2027 and US$250,000 in 2028, up from the current US$51,411. The catch for Canadian owners: the exemption applies only to an owner’s permanent Florida residence, meaning seasonal owners generally would not qualify. The measure needs 60% voter approval.
Florida’s Tax Math and the Pull Back to Canada
DeSantis has been explicit about the intent behind the measure. “I don’t want to give Canadians a tax cut,” he said. Beyond the exemption change, Amendment 3 would also cut the annual cap on assessment increases for non-homestead properties — which includes many Canadian-owned vacation homes — to 5% from 10%. The Florida Revenue Estimating Conference estimated in June that the measure would eventually reduce local non-school property tax revenue by about US$11.9 billion a year, a shortfall that would need to be absorbed elsewhere in the state’s tax base.
Despite the uncertainty, Canadian interest in U.S. property has not disappeared: Canadians accounted for 37.8% of international home-shopping demand on Realtor.com in the first quarter of 2026, even as many owners have pulled back from the broader U.S. market. According to reporting from Mortgage Professional America, some owners selling U.S. properties are reinvesting the proceeds closer to home, including in Toronto’s housing market, while Canada’s recreational property sector has settled into what was described as a more disciplined phase.
Speaking at MortgageFest Canada in Toronto in September, Tracy Valko, founder of AIMI Mortgage Collective, said entry points for buyers in Canada have become more attainable than in recent years. “Buying a home that’s worth $450,000 to $500,000 is realistic. Where it wasn’t like that three years ago. And if they’ve been sitting on the sidelines, hesitant to buy, they’ve saved more money,” she said.
That window may not stay open indefinitely. Grant Armstrong, chief growth officer at WealthOne Bank of Canada, pointed to early signs of rising financing costs, noting that GIC rates were up 35 basis points over the prior sixty to ninety days and Bank of Canada bond rates were up 60 basis points. Joe Flor, vice-president of national sales and broker relations at CMI Financial, offered a more cautious read on the broader recovery, saying consumer confidence needs to strengthen further heading into 2027.
Who Owns a Cottage — and Who Inherits It
Vacation-home ownership remains a meaningful slice of the Canadian housing landscape. Statistics Canada figures cited by the Globe and Mail put the share of Canadians who own a vacation home between 8% and 11%. With intergenerational wealth transfer underway, estate and trust consultant Derek Hambly of Scotiatrust said questions about how to pass down a cottage are coming up more frequently in financial planning.
Hambly said families often jump straight to legal structures like trusts or corporations without first asking what role they want the property to play for future generations. “While it can be tempting to focus immediately on legal structures such as trusts or corporations, the bigger question is often what role you want the property to play for future generations and whether a trust or corporation will help achieve that goal,” he said.
He cautioned that transferring ownership into a trust or corporation can trigger tax consequences and change how a property is treated going forward, making legal and tax advice essential before any transfer. A key limitation, he noted, is that most types of trusts and all corporations cannot claim the principal residence exemption, which otherwise shelters capital gains on sale. Both structures also come with ongoing administration and annual tax filings. Hambly said there is no universal best approach, since the right structure depends on a family’s relationships, tax situation and long-term goals for the property.
Affordability Trade-Offs Reshaping Buyer Behaviour
Broader affordability dynamics are also shaping how Canadians approach property purchases generally, including recreational ones. A Re/Max Canada survey found 65% of respondents would make at least one compromise to afford a larger or more suitable home, while 63% said they would relocate to better meet their needs, including 47% willing to move up to an hour from their current community.
Snapshot of Canada's Housing and Vacation-Home Market
The survey, part of Re/Max Canada’s 2026 fall housing market outlook, also found 41% of respondents would cut discretionary spending such as travel and dining out, 24% would extend their mortgage amortization period, and 17% would take on a second job or delay retirement savings to afford a home. Re/Max president Don Kottick said buyers are not giving up on ownership but are instead reassessing location, property type and financial choices. The outlook also found home sales declined in 81% of markets analyzed in the first seven months of 2026, even as average residential prices rose in 56% of markets, with 32% of markets now considered favourable to buyers, up from 15.2% a year earlier.
Taken together, the cross-border tax shift in Florida, generational succession questions around cottages, and shifting buyer compromises all point to a Canadian recreational property market in transition, with owners and prospective buyers weighing costs and trade-offs more carefully than in prior years.
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