Real Estate Insights

Pros and Cons of Buying Leasehold Property in Vancouver

By Vivian Suen, Senior Real Estate Specialist (Since 2016) | Updated for 2025

Buying a home in Vancouver is a significant investment, and you may come across "Leasehold" properties that seem much cheaper than others. Here is what you need to know.

What is a Leasehold Property?

The Short Answer: A leasehold property grants the buyer the right to occupy a unit or building for a specific period of time (the "lease term"), while the underlying land remains owned by a third party. You own the structure/right to live there, but you are effectively a long-term tenant of the land.

How It Works: The Core Mechanics

To understand leasehold in the context of the Vancouver real estate market, it is helpful to break it down into three distinct components:

• The Structure (You): When you "buy" a leasehold, you are purchasing the physical structure (the condo or townhouse) or the exclusive right to use that space.
• The Land (The Landlord): The dirt beneath the building is owned by a separate entity. In Vancouver, this is typically the City, a University, or a First Nation.
• The Clock (The Term): Unlike freehold property, ownership has an expiry date. Leases typically run for 99 years. As the lease counts down, the value and financing options for the property may change.

Leasehold vs. Freehold: The Main Difference

Types of Leasehold in Vancouver

It is critical to distinguish between the two payment structures found in the Greater Vancouver Area:

• Prepaid Lease: The total cost of the lease has been paid in full upfront by the original developer. You do not pay monthly rent for the land, only strata fees and taxes. This is common at UBC and SFU.
• Non-Prepaid (Monthly) Lease: You buy the unit at a lower price, but you must pay a monthly "land rent" to the landlord. These rents are usually reviewed and adjusted periodically. This is common in parts of the West End and False Creek.

Richmond vs. Burnaby: Where Should Families Buy in 2025?

By Vivian Suen, Senior Real Estate Specialist (Since 2016) | Updated for 2025

When young families ask me, "Which city is better?", my answer is always: "It depends on your lifestyle." Both cities are incredible, but they offer very different daily experiences. Here is a quick comparison to help you decide.

Richmond: The "Foodie Paradise" & Flat Terrain

Richmond is geographically distinct as an island city (Lulu Island), defined by its lack of hills and its world-class culinary reputation.

• The "Golden Village" Dining Scene: Richmond is widely recognized as having the best authentic Asian dining in North America. In 2025, the culinary focus remains on Alexandra Road (often called "Food Street") and the extensive options in the Golden Village. Families here have access to elite dining—from Michelin-recommended dim sum to night market street food—without leaving their neighborhood.
• Geographic Benefits: The terrain is completely flat. This makes it exceptionally stroller and senior-friendly.
  • The Dyke Trails: A massive network of flat walking/biking paths surrounds the island (e.g., the West Dyke Trail), offering ocean and sunset views.
  • Proximity to YVR: Ideal for frequent travelers, the city is minutes from Vancouver International Airport, though buyers should check flight path noise maps for specific neighborhoods.
• Family Amenities:
  • Minoru Centre for Active Living: A premier facility for seniors and aquatic sports.
  • Richmond Olympic Oval: A legacy venue from the 2010 games, now a massive multi-sport community hub.

Burnaby: Central, Connected & Green

Burnaby serves as the geographic center of Metro Vancouver, acting as the bridge between Vancouver, Surrey, and the Tri-Cities.

• Unmatched Centrality: If one parent works in Downtown Vancouver and the other in Surrey or Coquitlam, Burnaby is the strategic compromise.
  • Metrotown: The downtown of Burnaby. It features Metropolis at Metrotown (BC’s largest mall) and high-density living with immediate access to the Expo Line Skytrain.
  • Brentwood: A rapidly modernizing hub in North Burnaby with the "Amazing Brentwood" development, offering a high-end, walkable urban lifestyle connected by the Millennium Line.
• The "Park City" Ratio: Despite its density, Burnaby maintains a massive ratio of green space (25% of its land is parkland).
  • Deer Lake Park: The cultural heart of the city, featuring an art gallery, festival lawn, and easy boardwalk trails.
  • Central Park: A 90-hectare urban forest bordering Vancouver, famous for its towering Douglas firs and pitch-and-putt golf.
  • Burnaby Mountain: Home to SFU (Simon Fraser University), offering hiking trails with panoramic city views.
• Transit Accessibility: Burnaby is the best-connected city by Skytrain, serviced by both the Expo Line and Millennium Line, making car-free living entirely viable for families.

Summary Comparison Table

Buying Retail Space: Restaurants, Cafes & Bubble Tea

By Vivian Suen, Senior Real Estate Specialist (Since 2016) | Updated for 2025

The Golden Rule for Food Retail:
Never buy a retail unit assuming you can turn it into a restaurant. If the space was not previously a food establishment, the cost to upgrade ventilation, power, and plumbing can exceed the purchase price of the property.

Q: What are the key considerations when buying a food-retail unit?

1. Ventilation & "The Smell Factor"

• The Problem: Cooking food (especially frying or grilling) produces "grease-laden vapors." City codes (NFPA 96) require a specialized exhaust shaft that runs to the roof.
• The Trap: Many retail condos in mixed-use buildings (residential above) do not have this shaft installed. Retrofitting one is often impossible or prohibited by the Strata Council due to noise and smell affecting residents.
• Bubble Tea Nuance: Even bubble tea shops often require commercial ventilation because boiling tapioca pearls creates significant steam and humidity, which can cause mold if not vented.

2. Electrical & Gas Capacity

• Power: Commercial espresso machines, bubble tea sealers, and induction cooktops are power-hungry. A standard retail unit often has 100-200 amps; a full kitchen may need 400+ amps. Upgrading power in an older building is expensive.
• Gas: Many newer "eco-friendly" buildings in Vancouver are electric-only, meaning you cannot use gas woks or ranges.

3. Grease Traps (The "FOG" Issue)

• City bylaws strictly regulate Fats, Oils, and Grease (FOG). You must install a grease interceptor (trap).
• Constraint: If the unit has a concrete floor with no existing depression for a grease trap, you will need to raise the floor or expensive under-slab plumbing work.

Q: What are the steps to open a food business? (Vancouver vs. Richmond)

The process is generally 6-12 months from purchase to opening. (See also: Understanding Leasehold vs. Freehold if you are considering non-strata commercial properties).

Q: Vancouver Coastal Health (VCH) vs. Fraser Health: What is the difference?

This is a common confusion for buyers. The health authority you deal with depends on geography, not your personal preference.

• Vancouver Coastal Health (VCH):
  • Territory: Vancouver, Richmond, North Shore, Whistler.
  • Focus: They handle approvals for all food businesses in these cities.
  • The "Food Safety Plan": VCH requires you to submit a detailed plan before opening. They are known for strict enforcement of hand-washing sink placement (must be separate from prep sinks) and surface sanitization protocols.
• Fraser Health:
  • Territory: Burnaby, Surrey, Coquitlam, Delta.
  • Key Difference: If you buy a unit in Burnaby (e.g., Metrotown), you deal with Fraser Health. Their application forms and specific "Food Safety Plan" templates differ slightly from VCH. Do not use VCH forms for a Burnaby business.

No Massive Down Payment? You Can Still Buy a Home in 2025

By Vivian Suen, Senior Real Estate Specialist (Since 2016) | Updated for 2025

The Myth: "I need 20% down to buy in Vancouver."
The Reality: Most first-time buyers put down far less—often between 5% and 10%.

If you are staring at your savings account and feeling defeated by Vancouver's real estate prices, stop scrolling Zillow for a moment. The rules of engagement changed significantly in late 2024 and 2025. While prices are high, the government has introduced new tools specifically designed to help buyers who have income but lack a massive pile of cash.

Here is your roadmap to buying a home without a 20% down payment.

1. The "Power Combo": FHSA + HBP

If you take nothing else from this post, remember this acronym combination. It is the most efficient way to build a down payment quickly using pre-tax dollars.

The FHSA (First Home Savings Account)

• What it is: The "Holy Grail" of accounts. You get a tax deduction when you put money in (like an RRSP), and it’s tax-free when you pull it out for a home (like a TFSA).
• The Limit: You can contribute $8,000 per year (up to a $40,000 lifetime limit).
• The Strategy: If you haven't opened one yet, do it today. Even if you can't max it out, opening it starts your "carry-forward" room for next year.

The "Supercharged" HBP (Home Buyers' Plan)

• The Upgrade: As of mid-2024, the withdrawal limit was increased from $35k to $60,000.
• How it helps: You can borrow $60k from your own RRSP tax-free to buy a home. If you buy with a partner, that’s $120,000 of instant buying power you can access without triggering a tax bill.

2. The Game Changer: 30-Year Amortization

Effective December 15, 2024

For years, if you had less than a 20% down payment (an "insured mortgage"), you were forced to pay off your mortgage in 25 years. This kept monthly payments high and disqualified many buyers.

• The New Rule: First-time buyers can now access 30-year amortizations on all home types (both newly built and resale).
• The Impact: Stretching your payments over 30 years instead of 25 lowers your monthly mortgage bill significantly. This lowers your "debt-to-income ratio," making it easier to qualify for a loan with the same income.

3. Buying a New Build? Look for the GST Rebate

Effective May 2025

If you are looking at presales or newly completed condos, a massive new incentive arrived in Spring 2025.

• The Perk: A new First-Time Home Buyers’ GST Rebate applies to new homes valued up to $1.5 million.
• The Math: Previously, rebates phased out on homes over $450k (which is basically a parking spot in Vancouver). The new rules mean you could save thousands in tax that used to be a deal-breaker for new construction.

Alternative Routes (When Savings Aren't Enough)

If the traditional savings route is still too slow, consider these "creative" but legitimate structures:

A. The "Gifted" Down Payment

In Vancouver, this is the most common "secret" weapon.

• How it works: Immediate family (parents/grandparents) can give you a lump sum for your down payment.
• The Catch: It must be a gift, not a loan. Lenders will require a signed "Gift Letter" stating that the money does not need to be repaid. If you have to pay your parents back, it counts as debt and hurts your mortgage qualification.

B. Rent-to-Own (The Legitimate Way)

Be careful here—Craigslist is full of rent-to-own scams. However, legitimate developer-led programs do exist in Metro Vancouver.

• Example: Projects like Innova in North Vancouver have successfully piloted rent-to-own programs where a portion of your monthly rent is credited toward your future down payment.
• Tip: Always have a lawyer review a rent-to-own contract before you sign. You need to know exactly what happens to your accumulated "credits" if you decide not to buy the unit at the end of the term.

C. Co-Ownership (Buying with Friends)

You don't need a spouse to buy a home. You can buy with a sibling or a best friend.

• The Strategy: You pool your down payments and incomes to qualify for a larger mortgage (e.g., a 2-bedroom condo or townhouse).
• The Protection: You absolutely need a Co-Ownership Agreement drafted by a lawyer. This document answers the awkward questions: What happens if one of us wants to sell and the other doesn't? What if one of us gets a partner who moves in?

The Bottom Line

You do not need 20% down. You need 5% (on the first $500k) and 10% (on the portion above $500k).

Your Next Step: Before you visit an open house, talk to a mortgage broker who specifically understands the new December 2024 amortization rules. Many online calculators haven't updated yet—get a human to run the real numbers for you.

Looking for affordable family homes? Check out our guide on Richmond vs. Burnaby to compare neighborhoods.

Quick Real Estate Definitions

Common terms explained for buyers.

FHSA (First Home Savings Account)

A registered account combining the tax benefits of an RRSP and TFSA. Contributions are tax-deductible, and withdrawals for a home purchase are tax-free.

HBP (Home Buyers' Plan)

Allows first-time buyers to withdraw up to $60,000 from their RRSP tax-free to buy or build a qualifying home.

Prepaid Leasehold

A property where the lease has been paid in full upfront (often until 2073 or later). No monthly rent is paid to the landowner, only strata fees and taxes.

Strata Freehold

You own the unit and a share of the common property (land/building). This is the standard ownership model for condos in BC.