Buying or selling an apartment building: tenants, renovations, redevelopment and tax

The tenancies and deposits come with the building

When the building is sold, the tenancies continue on the same terms and the buyer becomes the landlord; the security deposits (each capped at half a month's rent) become the new landlord's responsibility to return. Deal with the transfer of deposits in the contract or the closing statement.

During the condition period, review every tenancy agreement, a rent roll certified by the seller, the deposit ledger, the operating expenses and the building's condition. No law sets this list; it is standard practice for a multi-family purchase, and lenders rely on the same documents.

In a building with five or more rental units that is not strata-titled, or is strata-titled with one owner of every unit, a landlord cannot end a tenancy for personal occupancy.

Rent: the yearly limit and capital expenditure increases

Rent can rise by at most 2.3% in 2026 and 2.2% in 2027, once every 12 months, with three months' notice. The limit does not apply to commercial tenancies, rent-geared-to-income non-profit housing, co-operative housing and some assisted-living facilities.

For major capital expenditures, a landlord can apply to the RTB for an additional increase: the costs must have been incurred in the 18 months before applying and not be expected to recur for at least five years, and they are amortized over 10 years (120 months). Each phase is capped at 3% on top of the annual limit, with any excess rolled into a second and third phase. Costs caused by inadequate repair or maintenance do not qualify.

Renovictions: you need an RTB order

Since July 1, 2021, a landlord who wants to end a tenancy for extensive renovations or repairs cannot simply serve a notice; they must apply through the RTB's dispute resolution process for an order of possession. All four conditions must be met: all necessary permits and approvals are in place and the landlord intends in good faith to renovate; the work requires the unit to be vacant; it is necessary to prolong or sustain the use of the unit or building; and ending the tenancy is the only reasonable way to achieve the vacancy.

The order takes effect no earlier than four months after it is made, and the tenant receives compensation equal to one month's rent; in a building with five or more rental units, the tenant has a right of first refusal to return once the work is done. A landlord who cannot prove the conditions were met owes the tenant 12 months' rent.

Demolition, or converting a unit to a non-residential use, uses a Four Month Notice (RTB-29); the tenant has 30 days to dispute and also receives one month's rent.

Vancouver: tenant relocation and rental replacement when you redevelop

In Vancouver, rezoning and development permit applications involving existing tenants fall under the city's Tenant Relocation and Protection Policy (TRPP). Tenants of one year or more are compensated by length of tenancy: 4 months' rent up to 5 years, 5 months up to 10, 6 months up to 20, 12 months up to 30, 18 months up to 40 and 24 months beyond that. Moving costs are also paid ($750 for a studio or one-bedroom, $1,000 for two or more bedrooms), at least three alternative homes must be identified, and tenants get a right of first refusal in the new building at 20% off starting market rents. Stronger terms apply in areas such as the Broadway Plan.

Vancouver's Rental Housing Stock Official Development Plan: a new development of three or more units that demolishes or changes the use of existing rental units must replace them one for one, secured as rental for 60 years or the life of the building, whichever is longer.

So if you are buying an older Vancouver rental building to redevelop, put both into your numbers before you offer.

Tax: transfer tax, relief for new purpose-built rental, and foreign buyers

Property transfer tax: 1% on the first $200,000, 2% up to $2 million and 3% above that, plus a further 2% on residential value over $3 million. BC Assessment classes apartment buildings as residential (Class 1); on a mixed-use building with shops at street level, the further 2% applies only to the residential portion.

New purpose-built rental buildings get relief that resales of existing buildings do not: at least four separate apartments, not stratified, rented monthly or longer for at least 10 years. Qualifying new buildings bought from January 1, 2025 to December 31, 2030 are exempt from the general property transfer tax, and since 2024 they can also be exempt from the further 2% over $3 million.

Federal GST: new purpose-built rental buildings (at least four units, 90% designated for long-term rental) whose construction began after September 13, 2023 and before 2031, and is substantially complete before 2036, qualify for a 100% GST rebate. Condo units, single homes, duplexes, triplexes and substantial renovations of existing buildings do not.

Foreign buyers: the federal ban does not cover buildings of four or more units, but BC's 20% additional property transfer tax applies to residential (Class 1) property, apartment buildings included, so foreign buyers in Metro Vancouver and the Capital, Fraser Valley, Central Okanagan and Nanaimo regional districts still pay it.

How I work on an apartment building

Buying: the rent roll, every tenancy agreement, the deposit ledger and recent years of operating expenses first, with net operating income worked out on today's rents; then the building's condition and capital plan; and, for a redevelopment, tenant compensation and rental replacement. The financing side — CMHC-insured multi-unit loans and how much down payment you need — is on my multi-family mortgage page.

Selling: have those documents ready before listing, so the buyer's condition period is spent on the building, not on waiting for paperwork. Buyers can include non-profits: the province created the $500-million Rental Protection Fund in 2023 to help non-profits buy existing rental buildings without displacing tenants.

If I act on both the building and the financing, I tell you in writing, before you sign anything, which role I am in and how I am paid in each.

Common questions

If I buy an apartment building in BC, do the existing tenancies stay?

Yes. The tenancies continue on the same terms, you become the landlord, and you take over responsibility for the deposits. In a building of five or more rental units with one owner, you cannot end a tenancy for personal occupancy.

Can I end tenancies to renovate an apartment building in BC?

Only with an RTB order, and all four conditions must be met. The order takes effect no earlier than four months after it is made, the tenant receives one month's rent, and in a building of five or more units the tenant can return after the work.

Can I pass the cost of major repairs on to tenants?

You can apply to the RTB for an additional rent increase: the cost is amortized over 10 years and each phase is capped at 3% on top of the annual limit. Costs from inadequate repair or maintenance do not qualify.

What do I owe tenants if I redevelop a rental building in Vancouver?

Under the TRPP: 4 to 24 months' rent depending on length of tenancy, $750 or $1,000 in moving costs, help finding three alternative homes, and a right of first refusal in the new building at 20% off starting market rents. The rental units must also be replaced one for one.

Is there a property transfer tax exemption for purpose-built rental buildings?

Only for new ones: at least four units, not stratified, rented for at least 10 years. Qualifying buildings bought from 2025 to 2030 are exempt from the general property transfer tax. Resales of existing buildings do not qualify.

Can non-Canadians buy a building with four or more units in BC?

The federal ban does not cover buildings of four or more units, so yes; but in Metro Vancouver and the Capital, Fraser Valley, Central Okanagan and Nanaimo regional districts, the 20% additional property transfer tax applies to residential property, which includes apartment buildings.