Carrying Costs

Learn about carrying costs in Canadian real estate — what they are, why they matter, and how they impact investment returns.

Carrying Costs

August 07, 2025


What are Carrying Costs?

Carrying costs, also known as holding costs, are the ongoing expenses incurred by property owners while holding real estate before it is sold, leased, or redeveloped.

Why Carrying Costs Matter in Real Estate

In Canadian real estate, carrying costs impact profitability and cash flow, especially for investors and developers.



Common carrying costs include:



Understanding carrying costs helps owners evaluate investment feasibility and plan exit strategies.

Example of Carrying Costs in Action

The developer factored carrying costs like property taxes and insurance into the project's overall budget.

Key Takeaways

  • Recurring expenses while holding a property
  • Includes taxes, mortgage, and maintenance costs
  • Affects cash flow and project profitability
  • Important for investors and developers
  • Helps determine holding period feasibility

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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