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Leasehold is a form of property tenure in which the buyer owns the building or unit but holds only a long-term lease — often 60, 99, or more years — on the underlying land, rather than owning the land itself as with a freehold property.
Unlike freehold ownership, a leasehold buyer's interest is registered against title as a lease of the land, not fee simple ownership of it. In Canada, leasehold arrangements are concentrated in specific markets, most notably parts of British Columbia, including developments on some institutional or First Nations land, where the underlying landowner leases the ground to unit owners for a long fixed term that shortens every year that passes.
Because the remaining lease term matters so much to value and risk, lenders scrutinize it closely: many require the remaining term to run well beyond the mortgage's amortization, and some A lenders avoid leasehold financing altogether. Brokers should confirm the exact remaining lease years, any rent-review clauses, and lender appetite early, since a leasehold property's value can decline simply because fewer years remain on the lease — separate from anything about the building itself.
Land, not just the building, is leased: unlike a condo or freehold home, the buyer's registered interest is a long-term lease of the land, not fee simple ownership.
Concentrated in specific markets: leasehold arrangements are most common in parts of British Columbia, including some developments on institutional or First Nations land.
Lenders limit remaining-term exposure: many lenders require the remaining lease term to run well beyond the mortgage's amortization, and some A lenders avoid leasehold financing altogether.
Value can decline with the lease: unlike freehold property, a leasehold property's value can fall simply because fewer years remain on the underlying lease, affecting both financing and resale.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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