DIFFERENCE BETWEEN FREEHOLD & LEASEHOLD PROPERTY

Leasehold and Freehold are the two forms of legal ownership of a property, whereby freehold property is a property or land, which is owned or inherited for life. As against, when a property is acquired under the lease, it is termed as Leasehold property. When you are buying a freehold property, it means that you are buying it in full for an indefinite length of time, which covers both the land and the property as well.

“A freehold property is a property that is ‘free from hold’ of any entity other than the legal owner, while a leasehold property is a property a lessee or tenant contracts to rent from a lessor over an agreed-upon time.”

On the other hand, the arrangement which confers the right to hold any property for a temporary period to another person or entity is called Lease, and the property which is transferred through a lease is termed as a leasehold property.

The main difference between freehold and leasehold property is their ownership. In a leasehold property, the property is leased to a lessor for a specific lease period, but the ownership of the land remains with the original owner. However, freehold property refers to the ownership of both the property and land on which it is built.

Freehold and leasehold are two terms that indicate the nature of ownership of a property. You have to know the difference between freehold and leasehold properties when looking for a potential apartment or home.

Difference Between Freehold & Leasehold Property:

• A freehold property is a property that is ‘free from hold’ of any entity other than the legal owner, while a leasehold property is a property a lessee or tenant contracts to rent from a lessor over an agreed-upon time.
• Freehold ownership involves the ownership of both the property and the land, while leasehold ownership only involves the property, not the land on which the property is built.
• In leasehold properties, one may have to pay an annual rent or payments, but in freehold properties, there are no such charges.
• In the case of leasehold ownership, transfer of property from one to another is relatively difficult, and transfer of leasehold rights is done through attorney power.In freehold ownership, the owner has full legal rights to either transfer or sell the property, and it is relatively hassle-free.
• Leasehold properties are relatively cheaper because of land being arranged on a lease.Freehold properties are relatively costlier due to significantly higher land prices as land is purchased on a freehold sale basis.

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