Selling property with your business: strategies to consider when planning a business transfer 

September 3, 2026 by National Bank of Canada
– 4 minutes

There’s a lot to consider when planning a business transfer (see How to prepare for the sale of your business and Business transfer: a seven-step guide). And if you have an owner-operated commercial building, you’ll have to add another decision onto your list: whether to sell the business and property at the same time, or sell the business and keep the property. Here are some factors to consider when deciding.

Photo of an entrepreneur preparing to sell their business using National Bank’s support and advice

Selling the business and property at the same time

This is the most common strategy for retiring business owners who are looking to walk away from the business entirely. It’s also an attractive choice when a specific location is critical to the business’ success, such as a pharmacy near a doctor's office or when moving facilities may not be a viable option, such as a movie theatre or agriculture business. Potential buyers may prefer to secure the property with the business rather than risk leasing the space.

Advantages of selling both at the same time

  • The full business transfer is done at once, with no hassle of managing property after the sale.
  • You, as the seller, have a boost of capital to retire or invest elsewhere.

Disadvantages of selling both at the same time

  • Potential buyers must have the capital to buy both the business operations and the building at the same time, which can decrease the size of the buyer pool.

  • Simultaneously negotiating the business sale and property sale increases complexity and may take additional time.

Good to know

The business and property should be valued separately.

 

While the business and building often work together, they are usually valued using different methods. Businesses are often valued based on earnings and growth potential, while commercial real estate is typically valued based on market conditions, comparable sales and rental income. Separate valuations can make negotiations easier and help buyers understand exactly what they're paying for.

Tax tip

In most owner-operated business sales, the commercial property is separated from the operating business and typically owned in a separate corporation. Even if you plan to sell them both at the same time, this can help you and potential buyers agree on fair valuation.

 

It’s also important for tax purposes, as this structure can significantly reduce taxes on the business sale by helping you qualify for the Lifetime Capital Gains Exemption. Note that land transfer fees vary by province – check with a professional to ensure the tax benefits outweigh the cost if you have to transfer the property to a new corporation owned by you prior to the sale.

Selling the business only and leasing the property 

This strategy can be helpful when your ideal buyer cannot afford to buy both the business operations and property at the same time. This scenario is more common when transferring a business to a family member or employee to help ensure the continued success of the business. Generally, the lease agreement with the purchaser will include a right of first refusal clause if the property is sold.

 

Some sellers who offer a Vendor Take-Back (VTB) loan on the business operations sale may also decide to keep the property to reduce risk: if the business fails, they still have an asset to fall back on. 

Advantages of selling the business only

  • Ability to earn continued income from leasing the property. Some owners use rental income from a retained commercial property as part of their retirement cash-flow strategy, creating ongoing income after they exit day-to-day operations.
  • Potential to sell the property at a time when market values are higher.

Disadvantages of selling the business only

  • You remain responsible for the property including structural issues, liability and maintenance.

  • Potential for late rent or even property vacancy if the business fails.

Questions to ask yourself

 
  • Is the property critical to the business’ operation?
  • Do you need cash right now or do you want to keep an income stream? 
  • Are you willing to manage a property or do you want a complete exit?
  • Can your ideal buyer afford to finance both the company and property right now? 
  • What are the current real estate market conditions/could the property appreciate over time?


 

 

You might want to sell both if… 

 

You might want to keep the property if… 
  • You want a complete exit.
  • The property is critical to the success of the business.
  • The buyer can finance the business and the property.
  • You want continued income from leasing.
  • The property value is likely to appreciate
  • Your ideal buyer cannot finance both the business and property at the same time.  

 

 

Choosing the right approach depends on your succession plan, retirement needs, deal structure and more. To help navigate the complexity, make sure you engage with the right advisors early – three years or more before you plan to sell. National Bank’s business transfer experts work with commercial banking, wealth management, and other partners to help you evaluate decisions from every angle.
 

Learn more about our guidance options and contact our business transfers team here: 

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