Buying A Home In The Okanagan On First Nations Land

Buying A Home in The Okanagan On First Nations LandAs a professional real estate office serving the vibrant Okanagan region, we understand that purchasing a property isn’t always about the home itself, but also about the unique surroundings in which it resides. With several breathtaking properties residing on Indigenous or leasehold land, you may consider that option for buying your next home. However, there are several nuances in how buying a home in the Okanagan on First Nations land is different in comparison to a traditional real estate investment.

Leasehold vs Freehold
Typically when you purchase a single family home, you also own the land on which the home resides (freehold). Purchasing a home on First Nations land means you own the home, but the land is owned by another entity such as the Penticton or Osoyoos Indian Band (leasehold).

To live in your home under a leasehold you will enter into a contractual obligation for the use of the land during a given period of time. These leases are long-term, often 99 to 125 years, and as the homeowner you will most likely pay monthly fees for maintenance, garbage removal, etc. On new projects the developer may have already paid the whole lease amount for you upfront. Once the lease term ends, it will be renewed or in some cases renegotiated.

Since several prime spots in the Okanagan are located on First Nation land, and the land that the home is on is not part of the purchase, usually leasehold homes are slightly less expensive than similar freehold homes. So, as a potential homeowner you may be able to purchase a home in a location that you would normally not be able to afford.

But, a possible consequence of being located on Indigenous land is that the infrastructure might not be as extensive as in urban areas. Access to utilities, public transportation, and other essential services could be limited, and you need to consider whether the location suits your needs before starting your ideal property search.

Market Value
As with any real estate investment, whether it’s traditional freehold or leasehold, the value is influenced by changes in zoning agreements, shifts in government policies, and market dynamics. A good example is the recently implemented regulations on short-term rental which don’t apply to Indigenous land. Still, in general, leasehold properties follow the market’s ups and downs in the same fashion as freehold properties.

So when you buy a leasehold home at a slightly lower than regular price point and the lease is far removed from its renewal date, there’s a good chance that your property will appreciate in value very much the same way as any freehold property would. However, as the lease renewal date draws closer or if lease conditions change after renewal, it may prove tougher to sell due to a lower number of buyers willing to take on the new or remaining lease.

Buying a home on First Nations land isn’t for everyone. Your personal situation, what you’re comfortable with, and what type of lifestyle you’re looking to achieve are all determining factors. The math is fairly simple, it's weighing your emotional values versus your rational values. It can be a great way for you to acquire an otherwise unattainable home at a lower cost of maintenance, and there are some excellent leases and developments in the Okanagan where the recent resale value speaks for itself.

On the other hand due diligence is key: it’s very important to know how the sublease is structured, and because the legal framework that governs Okanagan First Nations land involves Indigenous authorities, we recommend consulting with a legal expert before buying a home in the Okanagan on First Nations land.

Regardless of your decision, as a realty office we are committed to helping you navigate these types of complexities. Please view this information as a conversation starting point, not a substitute for legal advice, and call us today to find you the perfect home that meets your needs and aligns with your dreams. Go to our Contact Page or use the button below to get in touch with us directly.

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