Selling a Funeral Home With the Building: Real Estate vs Business in Ontario

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 9 min read — How Ontario owners split a funeral home sale between the building and the business: valuation, leases, sale-leasebacks, land value and taxes.

This guide is for Ontario funeral home owners who own the building as well as the business and want to know whether to sell them together, keep the property and rent it to the buyer, or sell it to an investor and lease it back. You will see how buyers split the value, the main options with their trade-offs, the lease terms that protect you, and the taxes to plan for in 2027.

Should I sell my funeral home building with the business?

Not automatically. The building and the business are two different assets that appeal to different buyers. A funeral company buys earnings. A landlord or investor buys a property and a long lease. A developer may only want the land. When you sell them as one package, you often get one blended price that underpays for one of the two.

A May 2025 interview in Southern Funeral Director, a US trade magazine, made the same point from the property side: buyers of funeral businesses focus mainly on EBITDA and often do not give full value to the real estate. That matches what I see when I separate the two pieces for clients. I handle both the business sale and the property, and I work with your lawyer and accountant on structure.

Zoning, holding rooms and building code rules for the premises are covered in my guide to funeral home premises in Ontario. This post is about value and deal structure.

How are a funeral home’s building and business valued separately?

A common lender approach in the US, described in American Funeral Director in March 2026, works in three steps:

1. Get the real estate appraised on its own.
2. Charge the business a fair market rent, about 8% of the appraised value in that article, and subtract it from the business’s cash flow.
3. Value the business on its cash flow after rent, then add the appraised value of the property.

This matters because the rent you could charge is the link between the two values. A higher rent raises what the property is worth to an investor but lowers the business’s earnings and its sale price. The trade-off is the same one investors use for any income property, which I explain in how commercial property is valued in the GTA.

A simple illustration

Round numbers, for illustration only: the business earns $400,000 a year before rent, and the building appraises at $1,500,000. At 8%, market rent is $120,000. If you keep the building and lease it to the buyer, you sell a business earning $280,000 after rent, and you keep a property paying you $120,000 a year. If you sell both, the buyer pays for both, but you no longer have the rent.

What are my options for the building?

Source: Southern Funeral Director, May 2025; American Funeral Director, March 2026; The Globe and Mail, January 2022. Options and risks summarized in my own words.

Want to see how the business value changes with and without the building? Try the estimator below.

How does a funeral home sale-leaseback work?

In a sale-leaseback, you sell the building to an investor and sign a long lease so the funeral home stays put. The Southern Funeral Director interview described typical US terms of about 20 years on a triple-net lease, where the tenant pays property tax, insurance and maintenance, with renewal options. It said this route can unlock the full value of the property, compared with the 50% to 70% a bank loan might lend against it.

Investors are active in this space in the US. Bisnow reported in February 2026 that Service Corporation International spent more than $181 million in 2024 buying the real estate under 26 funeral service properties and six cemeteries. I could not find published Ontario sale-leaseback terms for funeral homes, so treat US terms as a guide only. The general mechanics are in my post on how a sell-and-rent-back works in Ontario.

What lease terms protect me if I keep the building?

If you stay the landlord, the lease is your retirement income, so draft it as carefully as the sale agreement.

• Permitted use. Name funeral home use, including care and preparation of remains if the home embalms.
• Term and renewals. Long enough for the buyer’s lender, with renewals and rent resets you can live with.
• Rent and increases. Base rent tied to an appraisal, with set increases or an index.
• Who pays what. Property tax, insurance, roof, HVAC, the ventilation in the holding room and any lift.
• Assignment. Your consent if the buyer later sells the business to someone else.
• Security. A deposit, a personal or corporate guarantee, and a clear default process.
• Purchase option or right of first refusal. Decide whether the tenant can buy the building later, and on what terms.

My guide to commercial lease clauses in Ontario walks through each of these. Have your lawyer draft the final wording.

Is my funeral home building worth more as land?

Sometimes, especially in older urban neighbourhoods. The Globe and Mail reported in January 2022 that some buyers were interested in downtown funeral home properties for redevelopment rather than the funeral business. Bisnow described a US case where a funeral home property was valued at about $30 million while the business brought in roughly $2.5 million a year in revenue.

If your site might have redevelopment value, get two opinions: what the business and building are worth as a going funeral home, and what the land is worth to a developer under current zoning. If the land wins, a sale may mean relocating the business, which brings its own licensing and premises steps.

What taxes apply when the building is sold?

General points only. Confirm the details with your accountant and lawyer.

• HST. The CRA says a sale of commercial real property is generally taxable, new or used. When the buyer is GST/HST registered, the buyer usually accounts for the tax rather than paying it to you.
• The business election. When the buyer takes all or substantially all of the business (at least 90% of the property needed to run it), the CRA lets both sides jointly elect on Form GST44 so no GST/HST is payable on the sale. The CRA notes that tax still applies to taxable real property sold to a buyer who is not registered. My post on HST on land sales in Ontario has more.
• Land transfer tax. The buyer pays Ontario land transfer tax on the property: 0.5% up to $55,000, 1.0% to $250,000, 1.5% to $400,000, and 2.0% above that for commercial land. Inside the City of Toronto, the municipal land transfer tax applies as well.
• Capital gains and recapture. Selling a building you have depreciated can bring both. Your accountant will compare selling now with keeping it and collecting rent.

What will a buyer or lender check on the property?

The buyer’s licence application to the Bereavement Authority of Ontario asks for proof of zoning, an occupancy permit, a copy of the lease if the property is leased, a TSSA licence for any lift or elevator, and a hazardous waste generator number. Expect a lender to add a building condition report and an appraisal, and often an environmental review. Have these ready, because missing permits delay closing.

What to do next

1. Order a separate commercial appraisal of the building and, if your site is urban, a land value opinion.
2. Agree with your accountant on a fair market rent and run the business value after that rent.
3. Decide whether you want income (lease), cash now (sale-leaseback or full sale), or a land sale.
4. Gather the zoning letter, occupancy permit, lift licence and building records.
5. Book a confidential call with me to price the property and the business side by side.

Frequently asked questions

Sources

• Southern Funeral Director: A practical guide to sale-leasebacks for funeral home owners (May 2025)
• American Funeral Director: In the Know, Understanding Business Valuation in the Funeral Industry (March 2026)
• Bisnow: Meet the private equity-backed investors dying to buy funeral homes (February 2026)
• The Globe and Mail, Report on Business, 25 January 2022 (reprinted by James Reid Funeral Home)
• CRA: GST/HST Memorandum 19.4.1, Commercial Real Property, Sales and Rentals
• CRA: Selling a business
• Government of Ontario: Calculating land transfer tax
• Bereavement Authority of Ontario: Business Licence Application, Funeral Establishment and Transfer Service (May 2025)

Related reading

• Funeral Home for Sale in Ontario? How Owners Sell, Step by Step
• How Much Is a Funeral Home Worth in Ontario? Valuation Explained (2027)
• Who Buys Funeral Homes in Canada? Consolidators, Independents and Family Buyers
• Funeral Home Succession Planning in Ontario: Selling to Family, Staff or an Outside Buyer