Difference Between Freehold Property and Leasehold Property

Commonly we find new property buyers confused with the terms, freehold and leasehold. The difference between a leasehold property and a freehold property lays in its ownership. Hence better understand the difference between a leasehold property and a freehold property before the investment.  It is a very significant part of your property agreement, gives a picture of ownership attached and any ignorance on the part could add to your trouble later.


1) Freehold Property : The name itself says the meaning i.e. Free-Hold. This means that the estate you are buying is free from the hold of any unit besides the owner. Therefore the owner of the property is the legal owner and can sell/lease/rent/renovate or transfer the property as per his/her wish, keeping the local regulations in mind. In addition, if one plans to sell such a property, it won’t require any legal or government permission. The only disadvantage that comes with such properties is the increase in current cost.

2) Leasehold Property :  In a leasehold property, the ownership remains with the concerned local authority or the government. Here the ownership of the land on which the concerned real estate property is built (plot/flat/villa) is leased for a certain amount of time to the builder. Generally, the lease varies from 30 to even 99 years (in case of long term leases). But, this does not prevent the individual owner from selling or perform other transactions with the property, provided the lease deed is registered.

Freehold Property Leasehold Property
1.      Cheap
  1. Expensive
2.      Land belongs to the owner  2. Land belongs to the state/ leased  to owner for a fixed number of years
3.      Ownership Is Indefinite 3. At the end of the lease, owners must pay to extend the lease.
4.      Bank loan process is easy. 4. Bank loan process is tough and need lots of paperwork.
5.      Transferring the property is easy. 5. Transferring the property is tough. Requires state permission to transfer the ownership.

If you are buying an apartment in a housing complex, it might be possible that the land on which it’s built is leased. The future of such properties post the lease is a bit uncertain and somehow depends upon the amount paid by the society to renew the contract. Also, it’s a task for the buyer to avail loan from Government banks for leasehold property.

Converting Leasehold to Freehold Property

You can easily convert your leased property into freehold if you have the GPA (General Power Of Attorney), a clear Saledeed and a NOC (in case the land is under mortgage or rent) with you. In addition to this, you need to pay a conversion charge to the authorities.

More details contact http://homemantra.co/  Call @ 9845004863, 9900918807

Builder’s point of view buying land on lease is the best idea because as said earlier, such lands are comparatively low-priced if the builder is eyeing a prominent location. But if you are a new buyer and if you have a choice, then it is obviously better to go for freehold properties as they offer a better clarity on its future prospects.


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