When purchasing real estate, most people assume they’re buying the land and the home together. That’s called fee simple ownership, and it’s the most common form of property ownership in Canada. However, in some areas—especially near waterfronts, on First Nations land, or in resort communities—you might come across homes built on leased land.

So what does that mean for you as a buyer? Let’s break down the pros and considerations of purchasing a property on leased land.

What is Leased Land?

With leased land, you’re buying the home or building but not the land underneath it. Instead, you lease the land from a landlord (which could be a private owner, a government entity, or a First Nations band) for a set period—often 20, 50, or even 99 years.

Pros of Buying on Leased Land

1. Lower Purchase Price

Leased land properties are often more affordable than comparable fee simple homes, allowing access to more desirable locations or larger homes within your budget.

2. Potential Tax Savings (subject to legal advice at time of purchase)

Depending on the nature of the lease and property, you may not be required to pay GST on the purchase, and in some cases, the Property Transfer Tax (PTT) may not apply. These savings can be significant—especially for higher-value properties.

3. Restrictions

Leased land properties may be exempt from disallowing short-term rentals like Airbnb,—great for buyers seeking flexibility in ownership .

4. Opportunity to Own in Prime Locations

Leased land is common in waterfront communities, resort areas, or urban hubs. If you’ve dreamed of lake views or vacation-style living, this could be your in.

5. Less Property Maintenance

In certain leased land developments, the landowner handles common area maintenance or landscaping—similar to strata—reducing your personal upkeep responsibilities.

Considerations to Keep in Mind

1. Financing Can Be Tricky

Not all lenders finance homes on leased land. Terms may be stricter, down payments might be higher (often 25% or more), and some lenders will only finance if the lease has a long enough term remaining—usually at least 20–25 years.

2. Lease Expiration = Uncertainty

When the lease ends, you may have to renegotiate terms, vacate, or remove your home—depending on the lease agreement. Make sure you fully understand the length and renewal terms before purchasing. This will also limited your amortization options for financing.

3. Limited Appreciation Potential

Because the land isn’t yours, homes on leased land may not appreciate at the same rate as fee simple properties. That can impact your long-term investment return.

4. Monthly Lease Fees

In addition to your mortgage and taxes, you’ll pay a monthly lease or land rent. These fees can increase over time and need to be factored into your overall housing costs.

5. Legal Advice is Essential

Every lease is different. It’s absolutely essential to consult a real estate lawyer before purchasing to review the lease terms, confirm tax implications, and understand how the lease affects your o6. Possible Estate Planning Implications

Leased land can impact estate planning, including inheritance, transferability, and future value. For some families, this may offer a streamlined way to manage assets—though legal advice is crucial here to ensure proper planning. ownership and rights.

Who Might Leased Land Be Right For?

Buyers looking for affordability in high-demand areas
Snowbirds or part-time residents
Retirees who want a low-maintenance lifestyle
Investors with a short- to medium-term horizon and a clear exit plan

Final Thoughts

Purchasing a home on leased land can be a smart move—but it comes with unique considerations. It’s not “better” or “worse” than fee simple ownership; it’s just different. What matters is how it aligns with your financial goals, lifestyle, and long-term plans.

If you’re curious whether a leased land property is right for you—or you’ve found a listing and want to understand your financing options and legal considerations—we’re here to help.

Contact us at callateam@countoncalla.ca or 604-802-3983, and we’ll walk you through your options and connect you with trusted professionals to make sure you feel confident in your purchase.

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

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