How you structure a lodge sale can change what you keep more than a few points on the price. The main choices are whether you sell the lodge’s assets or the shares of the company that owns them, how the price is allocated among land, buildings, equipment and goodwill, and whether you finance part of the price yourself. Make these decisions with your accountant and lawyer before you sign a listing agreement. This page is part of our guide on how to sell a fishing lodge in Ontario.
Asset sale or share sale: what is the difference?
In an asset sale, the buyer purchases the land, buildings, equipment, licences that can be assigned, and goodwill. You or your company keep the company itself, with its past liabilities. If the lodge is not incorporated, every sale is an asset sale.
In a share sale, the buyer purchases the shares of the corporation that owns the lodge. The company keeps operating with the same assets, contracts and history, including any liabilities.
| Asset sale | Share sale | |
|---|---|---|
| What the buyer gets | Selected assets | The whole company |
| Past liabilities | Stay with the seller | Go with the company |
| Buyer’s tax position | New, higher cost base for depreciation | Inherits the company’s existing tax values |
| Seller’s tax position | Tax on gains and recapture, often inside the company | Capital gain on shares; may qualify for the lifetime capital gains exemption |
| Licences and permits | Usually need new applications or approval | The holder does not change, but some authorizations still need ministry consent |
Buyers often prefer an asset sale. Sellers of incorporated lodges often prefer a share sale. The price can reflect who gets which advantage. Licences and Crown permits often decide which structure works; see selling a lodge on Crown land.
What is the lifetime capital gains exemption?
The lifetime capital gains exemption (LCGE) lets an individual shelter capital gains on the sale of qualified small business corporation shares up to a lifetime limit. For dispositions on or after June 25, 2024, the limit rose from $1,016,836 to $1,250,000, and it is indexed to inflation from 2026. Each shareholder has their own limit, so shares held by a spouse or family members may multiply the amount sheltered, if the structure was set up properly.
To qualify, shares generally must pass tests, including:
- The company is a Canadian-controlled private corporation.
- At the time of sale, substantially all of its assets (90% or more by fair market value) are used in an active business in Canada.
- In the 24 months before the sale, more than 50% of its assets were used in an active business, and no one other than you or a related person owned the shares.
Cash or investments built up inside the company can fail these tests. That is why planning a year or two ahead matters. The exemption does not apply to an asset sale by a corporation.
Free report: Prepare Your Lodge for Sale. Twelve steps to take before you list, including when to bring in your accountant. Use the form at the end of this page.
How are capital gains taxed now?
The proposed increase in the capital gains inclusion rate was cancelled, so one-half of a capital gain is included in income. Gains above any exemption you claim are taxed at that rate. Confirm the current rules with your accountant in the year you sell.
Why does the price allocation matter?
In an asset sale, the agreement allocates the price among land, buildings, equipment, licences and goodwill. Each category is taxed differently:
- Land is not depreciable. Any gain is a capital gain.
- Buildings, docks, boats, motors and vehicles have been depreciated through capital cost allowance. Selling them for more than their tax value can create recapture, which is taxed as income.
- Goodwill and other intangibles have their own treatment.
Buyers want more of the price on equipment and buildings to depreciate faster. Sellers often prefer more on land and goodwill. Agree on the allocation in the purchase agreement so both sides file the same numbers.
Is GST/HST charged on a lodge sale?
It can be. When a registrant buyer acquires all or substantially all of the property needed to carry on the business, the buyer and seller can usually file a joint election so no GST/HST is collected on the sale. Ask your accountant whether the election applies. The buyer also pays Ontario land transfer tax on the land portion of the price.
What is vendor take-back financing?
In a vendor take-back (VTB), you lend the buyer part of the purchase price and are paid back over time, with interest. It is common in lodge sales, where bank financing may not cover the full price.
A VTB can widen your pool of buyers and support your price. It also leaves you exposed if the new owner struggles. Protect yourself with:
- A meaningful down payment from the buyer
- Security: a registered mortgage on owned land and a security agreement on equipment
- Clear terms on interest, payments and what happens on default
- Insurance naming you as an interested party
- Financial reporting from the buyer while the loan is outstanding
When proceeds are received over several years, a capital gains reserve may let you spread the taxable gain over up to five years. Your accountant can confirm whether it applies.
What other terms shape the deal?
- Holdbacks: part of the price held back until conditions are met, such as a licence transfer.
- Earn-outs: part of the price paid later, based on future results. Useful when you and the buyer disagree on value; risky if you no longer control results.
- Transition agreement: how long you stay on after closing and whether you are paid for it.
- Non-competition agreement: a promise not to open a competing lodge nearby for a period.
I am not a resident of Canada. What changes?
Some Canadian lodges are owned by people who live outside Canada. A non-resident who sells taxable Canadian property, such as Canadian land or shares that derive their value from it, must deal with the clearance certificate rules in section 116 of the Income Tax Act. Without a certificate, the buyer may withhold part of the price and send it to the Canada Revenue Agency. Start the process with a Canadian tax adviser well before closing.
Frequently asked questions
Should I incorporate before selling? Possibly, but the LCGE holding-period tests mean it must be done well in advance. Ask your accountant now, not after you find a buyer.
Can my spouse claim the exemption too? Only if they own qualifying shares that pass the tests. Structure matters.
Do advance deposits affect tax? Deposits for next season are usually credited to the buyer at closing; ask your accountant how to report them.
Does my value range change with structure? It can. See How Much Is My Fishing Lodge Worth?
Get the free report: Prepare Your Lodge for Sale
Twelve steps to take before you list, including how to measure your revenue and occupancy the way buyers and lenders will. Fill in the form and get instant access to the report.
General information only; not tax, legal or financial advice. Tax figures as of October 2026; confirm current rules with your accountant.