Читать книгу Buy & Sell Recreational Property in Canada - Geraldine Santiago - Страница 53

A leasehold interest means that the building or structure such as a townhouse, apartment, or house is built on government-owned land. That is, only the building or structure and not the land can be bought and owned by individuals, and leasehold fees must be paid. The term leasehold can also apply to single-detached houses on farmland, on First Nations land, and so on.

Leasehold interests are for a defined period of time, and the term can either be fixed or on-going. Frequently they are set for 99 years, in which case there will be no review of the lease rate for the full 99 years. After the term ends, the lease can usually be renewed. If the land lease does not have a fixed term, it will have periodic reviews of the lease rate, which is often done every 33 years.

The sale of a leasehold property differs greatly from the sale of a freehold property because the seller is only selling the improvements (the buildings) on the land, not the land itself. In the case of a 99-year lease, if the previous lessee had lived in a building on the leasehold land for 20 years, the new lessee would purchase the remaining portion of 79 years. The shorter the remaining portion, the less a buyer will pay for the leasehold.

Financing may be a big obstacle for buyers, as many institutions will not finance this type of sale. Ask your agent if he or she can provide a list of financial institutions that are receptive to financing leasehold interests.