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Leasehold vs. Freehold Property PDF Print E-mail
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Freehold Property

In the metropolitan cities property buying procedures are more difficult as there are multiple types of properties that exist there. Below we are going to discuss two kinds of properties, Freehold and Leasehold.

 The main difference between the two kinds is the land ownership and control. As the owner, you can mostly do what you wish with your home provided you keep within local planning rules. In leasehold; the ownership is mostly given by the government for tenure of 99 years.

Freehold Property
If you have purchased a freehold property then you own the land it is built on and also the house. In case of apartments, the owner of the house becomes a share holder in the property. You can live there for as long as you desire. You will have the right to make alterations in the house or redo some parts of the house. You might have to take permission from authorities if you have to make structural changes, particularly with old buildings. In India mostly houses are sold as freehold property but apartments are mostly on lease, however, this too is changing as many flats are getting sold as freehold too. According to Manish Tyagi, who has recently purchased a house in Noida, “I feel buying freehold property is better because it gives me freedom of mind as i don’t have to pay any kind of rent or charges to anyone”. According to Manish Thakur a Lawyer with the High Court, “In freehold property there is a Property Tax component which needs to be deposited every year, while the leasehold rent component is comparatively quite low and infrequent”.

Leasehold Property
In case you have purchased a leasehold property, then you have the right to live in a property for a stipulated period of time. Here the buyer is not the owner of the property or the land it is situated upon. In case of a leasehold property, you will have to pay ground rent to the owner or the leaseholder. Once the set period in the lease expires, the ownership of the property is given back to the land owner. Mostly leases are roughly given for period of 99 years. If anyone is buying a leasehold property, it is important to find out how long the lease is for as it will influence the value of the property. It is possible to extend the leasehold to up to 999 years and you can actually purchase the leasehold property, but by paying a price for it.

To conclude we can say that buying a freehold property is more preferable than the leasehold property as freehold are more stable and are likely to increase in value in the longer term.

Comparison between the two kinds of properties:



 Lease duration usually 30, 60, 99 or 999 years.


Duration limited by town planning authorities.

Lease transfers require State or its equivalent's approval.

Few limitations on transfer of property.

Power to acquire leasehold interest or withhold land when lease expires.

Some powers to acquire land for public works.

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Article Copyright: 99acres.com

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