Real Estate Talk:
Purchasing a country home

Thoughts and process when buying a second residence

By Joseph Marovitch

Updated April 9, 2025

Lately, there has been a surge of interest in lakefront and mountain-top second residences in the Laurentians and Townships. The reason for the recent interest is the momentary low interest rates, and the dwindling Canadian motivation to travel to the U.S. If one is in the market to purchase a second home, now is a very good time to do so. Rates are low, and the market demand for second homes, which had slowed down over the past few years, now provides a chance for motivated sellers to sell.

If you have not had the chance to take a drive to the Laurentians or Townships lately, do so now, and take the country roads, not the highway. Our countryside in summer is so spectacular that it can be life-changing as one experiences a new perspective. The majestic green mountains and fragrances of the country, as well as crystal lakes that look like glass, melt away all the pressures of the city.

So many people don’t know that the Earth is not covered in pavement, bricks, and mortar. If one lives in a city long enough and never strays beyond, one can forget what it means to be human and how natural it is to stare at a bonfire and stars, swim in clean lakes, view mountain vistas, and smell the morning mist.

When considering a country home to purchase, there are factors that come into play that would not otherwise, if you were purchasing in the city.

We were not meant to live in huge groups in big cities. The concept of cities is the concept of planetary consumption, overpopulation, and a lack of emotional touch with other humans. Is it not interesting that people observe that the more surrounded we are, the lonelier we can be? Yet, in small country towns and hamlets, everyone knows everyone intimately.

A second residence in the mountains and/or by the lake is a dream retreat for many. It is a sanctuary away from the hustle and bustle of city life. It is an escape from work and the daily grind, a change of scenery, a place to rest and gather one’s thoughts or think of nothing. It can also be fun and exciting. A mountain retreat can provide hiking trails, swimming, sailing, waterskiing, alpine skiing, bonfires at night and stars, lots of stars.

The process of purchasing a country home

When considering a “country home” to purchase, there are factors that come into play that would not otherwise if you were purchasing in the city. Most country homes are not in or near a town, therefore, the house must have its own well for water and a septic tank for septic situations.

If the property you are searching for has a waterfront, many more factors come into play, such as:

• Is the lake navigable or non-navigable (motorboats allowed or not)?
• Does the lake have an entrance and an exit, or is it sedimentary (meaning not enough oxygen enters the lake to make it liveable and drinkable)?

When searching for a country home, these are the questions that must be answered first:

1. How far do you want to drive from the city?
2. Do you want a lakefront?
3. Proximity to your neighbours? Most buyers of second homes want privacy, as this is their getaway home.
4. If lakefront, do you want motorboats or no motorboats?
5. Proximity to ski hills and towns?
6. Number of bedrooms and bathrooms?

Once you have found that perfect home, the items to inspect and consider are:

1. Condition of the house via a regular inspection
2. When was the chimney last cleaned and inspected?
3. Water test to ensure the well is clean and the water is potable (drinkable)
4. Lake water test to ensure the lake water is bacteria-safe for swimming
5. Ensure the septic tank is the right size, based on the number of bedrooms in the house.
6. Ensure the septic tank has been emptied. Most municipalities require the septic tank to be emptied every four years if the house is a second residence and every two years if it is a permanent residence.
7. Ensure that nothing is built on designated wetlands. Wetlands are areas near a lake or river that we are not allowed to build on, as it destroys the environment.
8. Does the house have a working sump pump? A sump pump is a device placed in the basement of the house, below the floor. When the water table rises in the spring, the sump pump automatically pumps the rising water out and away from the house to keep it dry. A sump pump is usually required for homes near a lake.

Finally, the tax implication. In Canada, a primary residence upon selling is tax-free. A second residence is considered a luxury item and is therefore not tax-free. Upon selling a second residence, any gain is considered a capital gain and is taxed at 50% of the gain.

‘In Canada a primary residence upon selling is tax-free. A second residence is considered a luxury item and is therefore not tax-free.’

If you paid $100,000 for the country home and later sold the property for $150,000, you would be taxed on 50% of the gain or on $25,000. The tax you must pay is dependent upon your income, therefore, it is always a good idea to purchase a second home by placing it in the name of the person in your household who has the least income to pay less tax.

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: Multiple offers on residential and income property

State of the market

Five-year fixed mortgage rates are as low as 3.89% (NESTO) at present. For buyers, a prudent course of action to protect against tariffs and reduce risk is to acquire pre-approval for up to 120 days. For those refinancing, lock in the lowest rate possible in a fixed mortgage rate. Tariffs cause inflation. Inflation causes higher interest rates.

Up to now, mortgage rates have been low, with a 5-year fixed mortgage hovering around 4.1%. Rates have dropped even further as banks were bracing for the incoming tariffs.

The tariff war began at midnight, April 8, when Trump instituted worldwide high tariffs on allies, enemies and penguins. Yes, Trump instituted tariffs on Heard Island, near Australia, where the only inhabitants are penguins.

‘Five-year fixed mortgage rates are as low as 3.89% (NESTO) at present. For buyers, a prudent course of action to protect against tariffs and reduce risk is to acquire pre-approval for up to 120 days.’

Before these tariffs, inflation rose as vendors increased prices in anticipation of dealing with the export taxes. The longer this tariff war remains, the higher inflation will rise. This will occur because those who sell to the U.S. will find less demand due to the higher price Canada must charge. The same issue will affect Canadians who will pay the tariffs that the U.S. applies. Not buying from the U.S. will not alleviate inflation as Canada must still deal with increased costs from purchasing abroad..

In creating new overseas trade partners, Canada will incur increased carrying costs due to further transport and a slowdown of the supply chain, as transport from overseas is more expensive and takes longer to deliver. As prices increase and inflation rises, it is likely that there will be a sudden reversal in the Bank of Canada’s interest rate.

Have a great week.

Let’s not forget that people with cancer are vulnerable too!

You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:

Image: Francesca Tosolini – Unsplash

Other articles by Joseph Marovitch
Other recent articles