Some real estate conversations stop too early.
A buyer hears the words land lease or leasehold, and the instinctive reaction is hesitation. You don’t own the land? The conversation ends. But in Calgary—and across Canada—land lease properties exist for a reason. And for the right buyer or investor, understanding how they actually work can open doors that others overlook.
With a leasehold property, you’re purchasing the building or structure, along with a long-term legal right to use the land beneath it. The land itself is owned by another party. That owner might be a private landholder, a government entity, an Indigenous community, or an institutional organization. The lease governing that land use is what defines the relationship.
These leases are typically long-term—often 20, 50, or even 99 years. That length matters. A well-structured lease gives stability, predictability, and clarity. A poorly understood one can introduce risk. Knowing the difference is critical.
As the leaseholder, you’ll pay ground rent to the landowner, usually on a monthly or annual basis, in addition to your mortgage payment on the structure itself. This is where many buyers need to pause and run the numbers carefully. The purchase price is often lower than comparable freehold properties, but the ongoing lease costs must be factored into long-term affordability.
The most important clause in any land lease agreement is what happens at the end of the lease term. In many cases, ownership of the land—and sometimes the improvements—reverts back to the landowner unless a renewal or extension has been negotiated. Some leases include renewal options. Others don’t. This single detail can dramatically affect resale value, financing options, and overall suitability depending on your goals.
That’s why land lease properties are never “good” or “bad” on their own. They’re contextual.
For some buyers, leasehold properties provide access to locations or property types that would otherwise be out of reach. For certain investors, they can make sense as a cash-flow-focused strategy with a defined timeline. For others—especially those prioritizing long-term appreciation or generational ownership—they may not align at all.
In a market like Calgary, where affordability, strategy, and segmentation matter more than ever, understanding ownership structures is part of making informed decisions. Leasehold properties require deeper due diligence, clearer timelines, and professional guidance—but they aren’t inherently flawed.
Real estate success doesn’t come from avoiding complexity. It comes from understanding it.
If you’re buying, selling, or investing in Calgary and aren’t sure which property type or ownership structure fits your goals, learning how land leases work is a smart place to start. The more clearly you understand the rules, the more confidently you can decide whether a leasehold property belongs in your plan—or not.
