DIFFERENCE BETWEEN LEASEHOLD AND FREEHOLD PROPERTY
LEASEHOLD PROPERTY
Leasehold
The common example of leasehold ownership owns a flat by way of leasehold ownership wherein a flat owner has the ownership of the flat and not the land on which the flat has been built. Generally, the lease tenor is 99 years and above in most cases. The ownership of the land and lease renewal remains uncertain in the case of leasehold property after the lease period’s expiry.
This type of property can be transferred by sale deed registration.
Advantages:
- Complete ownership and owners can make changes to the structures of their house
- It can be transferred through generations.
Disadvantages:
- Responsibilities of maintenance.
- Availability is designated to certain areas only
Freehold
An example of freehold ownership owns a standalone property/house, wherein one purchases the property with freehold ownership. In the case of freehold ownership, the owner doesn’t need to go through the expiry of lease and ownership post expiry, etc.
It is possible to extend the leasehold according to your comfort.
Advantage:
- It can be renewed at the end of the term, you can continue to live in the property if you want to extend.
- Mostly the landowner is responsible for maintenance of the property.
Disadvantage:
- To make changes in renovation or remodeling you have to make the permission from the landowner.
COMPARISON
| Freehold Property | Leasehold Property |
| The land belongs to the owner | Land belongs to the leased owner for a certain number of years |
| Ownership is indefinite | At the end of the lease period, the owner must pay to end the lease. |
| Not required to transfer the ownership | In order to transfer the ownership it is required state consent obtained at the land office |
| Banks will finance easily | If the banks the lease period is less than 30 years, most of the banks will not finance easily. |
