What should I know before buying a leasehold property in BC?

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You buy the right to use the land until the lease ends, not the land itself, so the years left, the rent and what happens at the end decide what the home is worth. In BC most leasehold homes are on First Nations reserve land, on Crown land leased by the Province, or in a strata whose land is leased from a government or public body. Each has its own registry, rules and taxes. Look up the address or PID on PlaceDossier to see the record for that lot. Leasehold on reserve land: Reserve land can't be sold to someone who isn't a member of the First Nation, so homes on it are held on leases. Under the Indian Act, the First Nation designates land for leasing by a community vote and the Minister grants the leases (ss. 38 (2), 53); land a member holds can also be leased on that member's application, a locatee lease (s. 58 (3)). A First Nation under its own land code grants leases under that code instead. Leases and permits on reserve land are registered with the federal government, not the Land Title Office. The Indian Lands Registry, or the First Nations Land Registry for a land code First Nation, records the lease; neither guarantees title as the Land Title Office does, so a lawyer who knows reserve leases should search it. Mortgages on reserve leases: A leasehold interest in designated land can be mortgaged (Indian Act s. 89 (1.1)), but lenders set their own terms for reserve leases, and some lend only where the First Nation backs the program or on long prepaid terms (our reading). Ask your lender before you write an offer. Taxes and services on reserve land: Many First Nations collect property tax from leaseholders under their own laws (Indian Act s. 83, or the First Nations Fiscal Management Act s. 5) in place of the local government's tax, and some charge their own property transfer tax when a lease is transferred. Water, sewer, fire protection and garbage may come from the First Nation or by agreement with a neighbouring council: ask the First Nation's lands or tax office what the lot pays and gets. Leasehold on Crown land: The Province leases Crown land for homes and cabins for up to 30 years. The rent is 3% of the land's assessed or appraised value a year, never under $850; a lease can't be assigned or sublet without the Province's permission, and a permanent residential lease is reassessed at market value when it is assigned. The Province no longer takes applications for new residential leases, except for leftover lots in an existing subdivision, but it takes applications to replace existing ones (the Province's residential land use page). A leasehold strata: In a leasehold strata the land belongs to the Province, the federal government, a municipality, a regional district, a treaty First Nation or another public body, and each strata lot is leased (Strata Property Act s. 199). The landlord chooses whether to renew and must say so in writing at least a year before the term ends; without that notice it must renew for 5 years (s. 210). A renewal keeps the lease's terms but sets a new rent from the land's market value (s. 211). If it doesn't renew, the landlord must buy the owner's interest at the price the lease sets, else its fair market value as if the lease weren't ending (s. 214). Property transfer tax: The Province's property transfer tax is charged when a transfer is registered at a land title office, and a lease counts when its term, with every option to renew, runs past 30 years (Property Transfer Tax Act ss. 1, 2 (1)). A reserve lease is registered with the federal government, not a land title office, so the Province's tax isn't charged on it (our reading), but the First Nation's own tax may be. What the years left mean: A prepaid lease is worth less as its term runs down, and a home on it can be hard to sell or mortgage in the last decades (our reading). Read the lease's end: whether it can be extended, on what terms, and whether the home must be removed or is handed over. What a report on the lot shows: A report reads the land itself: hazards, water, what's planned nearby, and whether it's reserve land. It can't read a lease's terms, its years left or its rent.

What should I know before buying a leasehold property in BC?

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Before you buy: who to ask