Generally Included as Property
A cottage or other second property owned by one or both spouses is generally included in the equalization of net family property, the same as the matrimonial home and other assets. It's worth noting, though, that only a family's primary matrimonial home generally carries the special equal-possession status under the Family Law Act — a second property like a cottage generally doesn't carry that same special status, even though it's still included in the overall property calculation.
Valuation Can Be Genuinely Harder
Recreational and seasonal properties can sometimes be genuinely harder to value than a primary residence, given fewer comparable sales in some areas, seasonal access issues, and sometimes shared ownership arrangements involving extended family. A professional appraisal is often worth the investment for these properties specifically, given how much a disputed valuation can affect the overall settlement.
Emotional and Extended-Family Considerations
Cottages in particular often carry significant multi-generational family history, which can make these negotiations more emotionally charged than other property divisions, and can sometimes involve extended family members who aren't formally part of the separation but have a real stake in what happens to the property. Being aware of this dynamic tends to help manage expectations and negotiations realistically.
General Possible Outcomes
Depending on the family's circumstances, outcomes can generally include one spouse keeping the property (often offsetting its value against other assets), selling it and dividing the proceeds, or in some cases an agreement for continued shared use for a transitional period, particularly where children are involved and the property has ongoing significance to the family.
Frequently Asked Questions
Does a cottage get the same special legal protection as the matrimonial home?
Generally, no — the equal-possession rule under the Family Law Act generally applies specifically to the primary matrimonial home, not to a second property like a cottage, even though the cottage is still included in the overall property calculation.
Is a cottage harder to value than a regular house?
It can be, given fewer comparable sales in some areas and sometimes complicated shared-ownership histories — a professional appraisal is often worth considering for these properties.
Can we keep sharing the cottage after separating?
Some families do agree to continued shared use for a period, particularly where children are involved, though this generally requires a clear, written agreement about how it will work.
What if extended family members also have an interest in the cottage?
This can add real complexity, since those family members generally aren't part of the separation process but can have a genuine stake in the property's future — worth addressing directly and early.
Does the principal residence tax exemption apply to a cottage?
Generally, the exemption applies per family unit across all properties owned, which can affect how it's allocated if a family owns both a matrimonial home and a cottage — confirm with a tax professional.