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Gaurav Srivastava | 20 Jan 2023

Know the Difference Between Freehold VS Leasehold Property

Know the Difference Between Freehold VS Leasehold Property

Table of Contents

  1. Freehold vs Leasehold Property #1: What is Freehold Property?
  2. Freehold vs Leasehold Property #2: Pros and Cons of Freehold Property
  3. Freehold vs Leasehold Property #3: What is Leasehold Property?
  4. Freehold vs Leasehold Property #4: Pros and Cons of Leasehold Property
  5. Freehold vs Leasehold Property #5: Freehold Property vs Leasehold Property- What is the exact difference?
  6. Freehold vs Leasehold Property #6: Which is better - Freehold Property or Leasehold Property?

Are you a first-time homebuyer? If yes,  you might have surely come across the terms 

“Freehold” and “Leasehold” property. Both these terms usually confuse property buyers and put them in a dilemma regarding which one to opt for. But have you ever thought about what they mean? Is there any sort of legal formality associated with them? And most importantly, which one is better than the other? 

Well, if you have all these questions in your mind then it’s time to clear them out. Here, we have got an informative article that will let you know about Freehold and Leasehold property in detail along with the difference between the two. Let’s start then!


What is Freehold Property?

Freehold property can be described as any entity or any estate that is completely “free from hold” besides the owner of the house. The people who purchase Freehold property can solely enjoy the free ownership of the property or can sell, renovate or transfer the property for any purpose as per the local rules and regulations. In other words, we can say that, if you own a freehold property, you own the land on which it is built and also the home. In the case of an apartment, the homeowner becomes a shareholder in the property. You as a homeowner can live in such a type of property for as long as you wish. Moreover, you hold the complete right to make any modifications in the house. 

As the owner, if you want to sell Freehold property, you won’t be required to do any legal formalities and it will moreover require less paperwork. Apart from this, one thing to note is that freehold properties are much more expensive than leasehold property types. But yes, there are no restrictions on the right of the freehold property and this kind of property is transferable by sale deed registration. 

Now as you have got to know the meaning of freehold property, let’s have a look at its pros and cons. 

Also Read: Home EMI Calculator

Pros and Cons of Freehold Property 

Here’s a list of the pros and cons of Freehold property!


  • It can easily be transferred through generations

  • The owner can freely make any changes or alterations to the structure of their home

  • The owner is not required to make any further payments in the form of service charge or ground rent


  • More expensive than leasehold property

  • For buying a freehold property, you might have to pay a high down payment for blocking the unit

What is Leasehold Property?

A leasehold property is the kind of property where you have the right to only stay for a stipulated period of time. In other words, we can say that, if you purchased a leasehold property then you don’t have complete control over that property or the land it is situated upon.

In such a case, you as a property buyer are not the owner of the property. You simply have to pay the ground rent to the lessor or leaseholder of the property. And, once the lease period is expired, all the property rights will go back to the owner or leaseholder. 

Here, one essential thing to note is that the tenure of the lease will directly influence the value of the property in the future. Also, you can easily extend the lease period as per your comfort. 

Also Read: Market Value of Property

Pros and Cons of Leasehold Property

Below are the pros and cons of Leasehold property!


  • Most of the time, the landowner is solely responsible for the maintenance of the property.

  • It can easily be renewed at the end of the particular period of time therefore you can continue living in the property if you wish to extend.

  • More affordable than freehold property.


  • In order to make changes or alterations to the property, you have to take prior permission from the owner of the land. 

  • No advantage from any increase in the value of the land.

Now that you have learned everything about Freehold and Leasehold property along with their pros and cons,  let’s gain insight into how they both are different from one another. 

Freehold Property vs Leasehold Property- What is the exact difference?

If we talk about the difference between Freehold and Leasehold property then the main difference between them is the land ownership and the control over the property. With Freehold property, you as a landowner have all the control and rights to everything you wish by following the local rules and regulations. 

On the other hand, in the case of leasehold property, the land belongs to the state which is then leased to the owner for a certain number of years. The ownership of such property is offered by the government for a tenure of 99 years that can easily be extended to 999 years if the owner of the property wishes to extend the lease. But in this case, you will have to pay the price for the lease extension. 

In order to have a better view, let’s have a quick look at the difference between Freehold and Leasehold property in the form of pointers below:

  • Rights: In a Freehold property, the owner has complete rights on the property and can make changes to it whereas in a Leasehold property the owner cannot make any changes as he/she does not hold complete rights.

  • Cost Involved: The cost of acquiring Freehold property is much more than acquiring the Leasehold property. 

  • Duties: In a Freehold property, duties and responsibilities are not compulsory whereas the tenant has to follow all the duties and responsibilities in a Leasehold property.

  • Bank Loan: It is far easier to procure a bank loan in the case of Freehold property as compared to Leasehold property because, in a Leasehold property, the loan depends upon the tenure of the lease.

  • Charges Involved: Freehold property does not include any kind of charges whereas Leasehold property generally involves a considerable amount of charges.

Which is better- Freehold Property or Leasehold Property?

Freehold and Leasehold are the legal terms that describe the kind of ownership of a property by the owner. In the case of Leasehold ownership, the house on the land is leased to the owner of the house for a certain lease period but the ownership of the land still belongs to the original owner. Conversely, freehold refers to the ownership of both the land on which the house has been built and the house.

Suitability: If you are someone who is planning to settle on a permanent basis then buying a Freehold property is the best option whereas if you are planning for a business or temporary stay then you can lease. 

Also Read: Renting vs Buying A House

Now, when it comes to choosing the best between the two then Freehold ownership is relatively preferable and better in terms of flexibility in selling the property, clarity on ownership, and availing mortgage loans in comparison to leasehold ownership. 

The Leasehold property is highly preferable for situations where there is a budget limitation otherwise Freehold property is always the best option to opt for.

So far, we have discussed everything about Freehold and Leasehold property along with the differences between the two. When it comes to opting for the best option between them everyone has their own opinion that highly affects the choice. But if you ask us, we will suggest you consider important factors like budget, flexibility, and more before opting for either freehold or leasehold property. So, good luck and we hope you will make a good decision soon. 


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