Leasehold vs freehold india

What does leasehold and freehold mean? According to Ramesh Nair, COO Buisness, JLL India , “Given a choice - and if the budget permits - it is preferable to invest in a freehold alternative, given the better clarity on the future. What is leasehold and freehold in real estate? As an owner, you can mostly do what you wish with your home, provided you keep within the local planning rules.

In the case of a leasehold property , the ownership is given by the government for a tenure of years.

Understandably, freehold assets are more expensive when compared to leasehold assets. Leasehold Property : As the name suggests, here the ownership of the land on which the property is built is leased for a certain amount of time to the developer. Freehold vs leasehold – the key differences When buying or selling your home, there are certain factors that can affect its value and its appeal, not least whether the property is freehold or leasehold. They are completely different ways of owning a property, so it is important to understand the differences between them.

A freehold property will always have loan availability from any bank in India. The property can be mortgaged and kept as collateral for any financing activity. A leasehold property has loan available only at the time of first allotment (that too when the builder has negotiated with certain banks).

The key difference between leasehold and freehold is that in case of the Leasehold , the property is given on lease to the lessee by the owner of the property where there are various restriction for its usage, whereas in case of the freehold owner has the full ownership of the property with no restrictions on its transfer, modification or construction.

Freehold : Someone who owns the freehold of a property owns the property and the land it stands on. Leasehold : Unlike a freeholder , as a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property from the freeholder for a number of years, decades or centuries. There is no difference between a freehold and leasehold from the view of the rental market and there shouldn’t be any difference in the rental rates between the two kinds of properties.

As a result, the rental yield is higher for a leasehold compared to a freehold. Investors should focus on the important principles. Leasehold land on which construction takes place is ordinarily on long-term lease of 99. By now, most of us know that two types of property ownership exist in India ’s urban areas- Leasehold and Freehold.

But not many are well-versed with the various differences and implications of owning a leasehold vis-à-vis a freehold property. Leasehold properties are not freely transferable and the transactions are done through Power of Attorney (POA). Most of the property in India is freehold , which means that ownership is transferable.

Also, we bring you various pros and cons of acquiring property on. The difference between leasehold and freehold is quite simple. With leasehold , you own the property itself for a certain period of time agreed with the freeholder, but not the land it stands on. Whereas, with freehold , you have outright ownership of both the property and its land.

DISCLAIMER: The following is my own, simplifie layman understanding of leasehold and freehold.

In such properties, the title paramount, ie. President of India acts through DDA, LDO. One is required to pay charges for it.

Freehold : Outright ownership of the property and land on which it stands. A freehold estate in land (as opposed to a leasehold ) is where the owner of the land has no time limit to his period of ownership. Lease lengths vary and most common are 9 1(in the case of ex local authority) 5and 999. Legally there are two kinds: freehold and leasehold. Freehold properties in India In most of the Indian states, properties are developed on freehold land.

However, in metropolitan areas like Noida and Navi Mumbai, the government owns the lan and it. In some specific areas such as Delhi, there are leasehold and freehold property transactions. Once the lease expires, the ownership of the property is given back to the original owner. Most of the time, the leases are for years but can be extended up to 9years. In simple terms it means sale of ownership rights of land by the Govt.

With a freehold , you basically own the property and the right to remain in the property in perpetuity, provided you make timely payments to your lender.