Fee simple is outright, unlimited-duration ownership of land: “with fee simple you own the asset. With leasehold you own a countdown.”
Fee simple means the buyer owns the land itself, with no expiry date. The alternative, leasehold, is a right to use land for a fixed term — typically 40, 49, 75, or 99 years — after which the interest reverts unless the lease provides otherwise. Most residential real estate an agent handles is fee simple by default; leasehold shows up often enough on specific developments, First Nations land, and some institutional ground leases that it’s worth knowing when to flag it rather than assume it.
Before recommending a leasehold property to a client, check the remaining term, not the original term — “this drives everything else”, what happens at expiry (renewal, compensation, or reversion, governed entirely by the lease document rather than general property law), the ground-rent structure, and whether a lender will actually finance that specific property at that remaining term — confirmed in writing before a financing condition is waived. Leasehold is described as a “wasting asset” — value declines as expiry approaches, particularly below roughly 40 remaining years, which is exactly the kind of detail a comparable-price listing won’t surface on its own.
Two nearly identical downtown units list at similar prices: one fee simple, one leasehold with 52 years remaining on an original 99-year ground lease. A buyer comparing them on price alone misses that the leasehold unit’s value curve bends downward meaningfully once the remaining term drops under roughly 40 years, and that a lender may become reluctant to finance it as the term shortens further. Flagging the remaining-term math before an offer goes in — not after a financing condition is already waived — is the difference between an informed buyer and one who finds out at renewal.
See also: joint tenancy, leasehold interest and a restrictive covenant.
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