In Vancouver, owning your commercial space usually costs more cash each year than leasing, but it builds equity that a lease never does. In our ten-year example below, a business that buys a $3 million strata unit spends about $260,000 more than it would on a comparable lease if the property's value stays flat. If the value rises by about 2% a year, owning comes out ahead even after counting what the down payment could have earned elsewhere. The right answer depends on how long you will stay, how much cash your business can tie up, and how you feel about property values in your area.
What does leasing really cost?
A commercial lease in Metro Vancouver usually has two parts: base rent, and additional rent that covers your share of property taxes, insurance, maintenance and building costs. Base rent normally rises at set intervals during the term, and both parts can rise at renewal.
Leasing has real advantages. You keep your cash in the business, you can move when the lease ends, and the landlord carries the risk of the building losing value. For a growing company that may need twice the space in three years, that flexibility can be worth more than equity.
What does owning really cost?
When you buy, your costs include:
- The down payment. Often 25% or more with a conventional commercial mortgage. Some owner-occupied programs finance up to 100% for qualifying businesses; see how business owners buy with little or no money down.
- Mortgage payments, part interest and part principal.
- Property taxes, insurance, maintenance and strata fees, which you pay directly instead of through additional rent.
- Purchase costs: property transfer tax, legal fees, inspections and appraisal. GST applies to most commercial property, though registered businesses can usually self-assess it. See GST on commercial property in BC.
A ten-year example
These numbers are for illustration only. They are not a quote, a forecast or financial advice, and your lender and accountant should run the numbers for your situation.
A professional firm needs about 3,000 square feet in Vancouver.
Option 1: Lease. Total rent of $40 per square foot, base plus additional rent, is $120,000 in year one. If it rises 3% a year, the firm pays about $1.38 million over ten years and owns nothing at the end.
Option 2: Buy. A comparable strata unit costs $3 million.
- Down payment of 25%: $750,000.
- Mortgage of $2.25 million at 5.5% over 25 years: about $165,800 a year, or $1.66 million over ten years.
- Taxes, strata fees, insurance and upkeep of about $45,000 a year: $450,000 over ten years.
- Property transfer tax of about $68,000, plus roughly $20,000 in legal and due diligence costs.
Total cash out over ten years: about $2.95 million. But after ten years the mortgage balance has dropped to about $1.69 million. If the unit is still worth $3 million, the firm owns about $1.31 million in equity, made up of the down payment and roughly $559,000 of principal repaid.
The comparison. Cash out minus equity kept is about $1.64 million for owning, against $1.38 million for leasing. With a flat property value, owning costs about $260,000 more over ten years. The $750,000 down payment could also have earned a return elsewhere: at 4% a year, roughly $360,000 over ten years. Adding that in, owning needs the property to gain about $620,000 in value, roughly 2% a year, to match leasing. Any growth above that is profit for the owner.
Change the inputs and the answer moves. Higher rent, lower interest rates, a smaller down payment or a longer stay all favour buying. A short time horizon, high interest rates or a property in a weak location favour leasing.
What about taxes?
Rent is generally a deductible business expense. When you own, mortgage interest, property taxes and operating costs are generally deductible, and the building can be depreciated over time through capital cost allowance, but the land cannot. Many owners hold the property in a separate holding company and lease it to the operating business, which can help with liability and future planning. When you sell, any gain may be taxable. These rules are complex and depend on your structure, so talk to your accountant before you buy. Our guide to capital gains on real estate in Canada covers the basics.
When does leasing still make sense?
- Your business may need much more or much less space within five years.
- You need your cash for equipment, staff or inventory that earns more than property would.
- You want a location, such as a downtown storefront, that is rarely for sale.
- The landlord is offering strong incentives. With downtown Vancouver office vacancy at 12.2% in the third quarter of 2026, according to Colliers, many landlords are offering free rent and improvement allowances.
When does buying make sense?
- You plan to stay in the same area for ten years or more.
- Your rent has jumped at renewal, or you worry it will.
- Your business has steady cash flow and two or more years of good financial statements.
- You want a long-term asset outside the business, for retirement or succession.
How we help you decide
The Oberoi Group has helped business owners across Metro Vancouver and the Fraser Valley move from leasing to owning, including with up to 100% financing for qualified buyers. We ranked among the Top 3 commercial teams across Canada at RE/MAX in 2025, based on commission.
Learn more about owning your commercial space, see the market on our Vancouver commercial real estate page, or book a buy-vs-lease review. We will compare your current lease with real properties that fit your business, using your own numbers.
Frequently asked questions
Is it cheaper to buy or lease commercial space?
Leasing usually costs less cash each year. Buying builds equity, so over ten years or more it can cost less overall, depending on interest rates, property values and how long you stay.
How much down payment do I need to buy commercial property?
Conventional commercial mortgages often need 25% or more. Some owner-occupied programs finance up to 100% for qualifying businesses.
Can my business deduct rent or mortgage interest?
Rent is generally deductible. When you own, mortgage interest, property taxes and operating costs are generally deductible, and the building can be depreciated. Ask your accountant how this applies to you.
When does leasing make more sense than buying?
When your space needs may change soon, when your cash earns more in the business, or when landlords are offering strong incentives.
Sources
Rates, thresholds and program rules in this article were checked against these official pages on October 16, 2026. Rules change, so confirm current details before you act.