Difference Between Free Hold and Leased property
What’s freehold property?
Any estate which is “free from hold” of any entity besides the owner is termed as freehold property. So, the owner of such an estate enjoys free ownership for as long as he/she wants to. The owner can use the land for any purposes in accordance with the local regulations. Sale of a freehold property does not require consent from the state and hence requires less paperwork, thus, making it more expensive than leasehold property.
This kind of property is inheritable without any restrictions on the right of the property owner to further transfer the property. In a freehold property, there is no hindrance to the absolute title of the property. A freehold is not akin to a condominium wherein the owner of the individual unit pays a maintenance charge. Freehold property can be inherited by a legal guardian. A freehold property can be transferred by registration of the sale deed.
What’s leased property?
If you own the leasehold of a property, you own the property (subject to the terms of the leasehold) for the length of your lease agreement with the freeholder. When the lease ends, ownership returns to the freeholder, unless you can extend the lease. When you buy a leasehold property, you either take over a new lease created by the freeholder or you take on the existing lease that the previous owner of the property had been holding.
Most flats and maisonettes are on leasehold, so here you own your property in the building, but you have no stake in the building it is in.
Some houses are sold as leaseholds. If this is the case, you own the property, but not the land it sits on.
The main difference between freehold property and leasehold property is the land ownership and right/control over the property. On your property, as an owner, you hold all rights to whatever you wish by following the local regulations. In the case of leasehold property, the ownership is offered by the government for a tenure of 99 years you can extend the leasehold to 999 years if the owner of the property wishes to extend the lease, you will have to pay a price for the lease extension.