Leasehold vs. Freehold in BC: 2025 Guide

British Columbia has a significant number of leasehold properties, particularly in Vancouver's prestigious waterfront neighbourhoods like Coal Harbour and False Creek. Leasehold condos can be 20–35% cheaper than equivalent freehold units — but that discount comes with real risks. Understanding the difference is essential before you buy.

What Is Freehold Ownership?

In a freehold (also called fee simple) purchase, you own the building unit and your proportionate share of the land it sits on outright. This is the most common form of property ownership in Canada. When you sell, you transfer full ownership of both the unit and the land interest. Freehold properties face no ground rent and no lease expiry risk.

What Is Leasehold Ownership?

In a leasehold purchase, you own the building unit (the "improvements") but lease the land beneath it from a landowner (called the "lessor" or "ground lessor"). You pay ground rent to the landowner, and your right to occupy expires when the lease term ends. In Vancouver, major leaseholders include the City of Vancouver, the Musqueam Nation, and the Federal government (through Canada Lands).

Where You'll Find Leasehold Properties in BC

• Musqueam lands (SW Marine Drive/University area): 99-year leases from 1965, many now 40–55 years remaining; significant rent increases at review periods
• City of Vancouver (False Creek): Prepaid leases with 50–99 years remaining
• Coal Harbour (Federal lands): Various lease structures
• Whistler and resort communities: Common in resort strata properties

Ground Rent: The Hidden Ongoing Cost

Ground rent is the annual payment you make to the landowner for use of the land. It varies enormously:

• City of Vancouver leasehold: Many False Creek strata leases were prepaid (paid upfront at purchase), meaning $0 annual ground rent. However, when the lease renews, ground rent resets to current market land value.
• Musqueam leasehold (UBC/SW Marine area): Ground rent reviews occur every 20 years and reset to a percentage of current land value. After the 2014 review, rents in some buildings jumped from $2,000–$5,000/year to $15,000–$40,000/year per unit — devastating for owners who didn't plan ahead.

Financing Leasehold Properties

Getting a mortgage on a leasehold property is significantly harder than freehold. Lenders generally require:

• At least 15–30 years remaining on the lease beyond the mortgage amortization period (a 25-year amortization requires 40–55+ years remaining)
• Many major lenders won't touch leasehold at all, limiting you to a smaller pool of lenders and potentially higher rates
• CMHC does not insure leasehold mortgages, so minimum 20% down is typically required
• As the lease term shortens, financing becomes increasingly difficult

Resale Challenges with Leasehold

As the lease term decreases, the pool of buyers shrinks (harder to finance), values typically decline relative to freehold equivalents, and the discount deepens. A unit with 40 years remaining is relatively easy to sell; one with 20 years remaining is a very different story. Plan your exit strategy before you buy — if you're young and buying for the long term, a leasehold with 50+ years remaining could work; if you're buying for 5–10 years, the resale challenges may not matter.

Leasehold vs. Freehold: Key Comparison

When Leasehold Can Make Sense

Leasehold is not inherently bad — it depends on the specific lease terms. A prepaid City of Vancouver lease with 80+ years remaining and a well-defined, affordable ground rent review formula can be a reasonable purchase at the right price discount. The key is understanding the specific lease document before committing.

Always have a real estate lawyer experienced with leasehold review the lease document before waiving any conditions. The cost ($500–$1,000) is trivial compared to the potential exposure.

Related Guides

• Buying a Condo in Vancouver
• Strata Fees in BC
• Closing Costs in Vancouver
• Foreign Buyer Tax in BC