What’s the Difference Between Freehold and Leasehold Properties in the UAE?

UAE is an Emirates country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. Many people have dreamed of purchasing property in the Middle East. Still, it is essential to acquire awareness that two primary types of tenure govern property ownership: freehold and leasehold. Hence, if you understand the difference between these two types of property, investing in real estate in the country will be crucial. While both have advantages, they differ significantly in legal rights, duration, and the level of controlling property ownership. 

What’s the Difference Between Freehold and Leasehold Properties in the UAE?

When purchasing property in the UAE, you will find the two significant differences between freehold and leasehold property. It is said that with freehold, you generally own the property and the land to construct. On the other hand, leasehold property provides you the right to have a period of living in that property. Hence, the fundamental difference between the two is that many utilize this property to serve objectives according to their needs and preferences. This means that you can have the advantage of these properties, but there is a significant difference, which everyone must know. 

Freehold Property

Freehold property generally directs to a real estate privilege structure in which someone can own the property outright, including the land on which it is constructed. With this arrangement, you will have complete control and ownership rights over the property without any time limitations. Hence, freehold ownership is considered the most desirable and secure form of property ownership because it gives you complete control over the asset. To define it better, check out the valuable details below. 

• In the UAE, freehold properties are typically available in designated areas or freehold zones primarily located in major cities like Dubai and Abu Dhabi.
• They have been established to encourage foreign investment in the real estate sector, where numerous people come to invest and utilize more benefits.
• If you are in Downtown Dubai, Palm Jumeirah, or Dubai Marina, there are designated freehold zones where non-UAE nationals can easily purchase property.
• Freehold property generally includes the ability to sell, rent, or lease the property without restrictions and enjoy additional benefits.
• It grants you the right to modify or develop the property, which is subject to local regulations and approvals effortlessly. 

Lease property:

Leasehold property is generally owned by the buyer, who owns the right to use the property for a specified period but does not own the land on which it is built. It is a generous government entity where a developer or a private individual typically owns the land. If you become a Leaseholder in the UAE, its ownership is usually offered for 30 to 99 years, after which the ownership rights revert to the original landowner unless a renewal or extension is agreed upon. Such a facility is more common in areas where freehold ownership is not permitted or in certain older developments where the government or a private entity may own the land. These types of properties are often more affordable than freehold properties.