What you should know about freehold and leasehold properties

I am on the lookout for a property in Dubai, but I am often confused between the terms freehold and lease (hold)? I am an expat who wants to buy a flat. Should I opt for freehold or leasehold? What are the benefits and negatives of the two?

The term leasehold means you will own the property rights for a fixed term, which is a maximum of 99 years. However, you will not own the property’s land, the total ownership of the land goes back to the freeholder.

The benefits of owning a leasehold property include:

The initial cost of purchasing a leasehold property is often lower than that of a freehold property.

You are not fully responsible for the maintenance and upkeep of the building, as this is the responsibility of the freeholder or landlord.

You may have access to additional amenities such as communal gardens or leisure facilities.

The negatives of owning a leasehold property:

You are subject to the terms of the lease which can limit what you can do with the property. Any upgrades or alterations you'd like to make to the property require written approval from the freehold owner.

You may face other restrictions and less control over the management when it comes to subleasing the property or owning pets.

You may be required to pay ground rent and service charges which can increase over time.

Whereas freehold ownership if you buy the property on a freehold basis you have absolute ownership of the property and the land it’s built on. The property can then be sold, leased or occupied at the owner’s wishes.

George Barker is sales consultant at Betterhomes. Views expressed are his own and do not necessarily reflect those of Khaleej Times.