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Freehold vs Leasehold: Understanding the differences in property ownership

Posted by admin on March 1, 2023

If you are considering buying or investing in property in Dubai, it is essential to understand the two types of ownership available: freehold and leasehold. Each ownership type has its own advantages and disadvantages, and it’s crucial to have a good understanding of them before making any decision. In this article, we will delve into the details of these ownership types, their benefits, differences, and drawbacks to help you make an informed decision about your Dubai property investment.

Freehold properties

In Dubai, freehold properties are real estate assets that grant full ownership rights to the buyer, including complete control over the property and the land it is built on. This means that the buyer has the authority to make decisions about the property’s usage, such as renting, leasing, selling, or mortgaging, at their discretion. Unlike leasehold properties, freehold properties can be purchased by both UAE nationals and foreigners without any restrictions on ownership, making them a popular choice for real estate investments in Dubai.

Leasehold Properties 

Leasehold properties in Dubai are typically located in areas designated for expat communities and are owned by landlords or developers. The buyer of a leasehold property has a lease agreement for a specific period of time, which can range from 30 to 99 years, depending on the terms of the agreement. These properties are mainly marketed to foreigners interested in investing in Dubai’s real estate market.

Freehold vs Leasehold

1. Ownership rights: Freehold properties in Dubai provide the buyer with complete ownership rights, whereas leasehold properties offer limited ownership rights for the duration of the lease agreement. Furthermore, freehold properties can be used as collateral for loans, whereas leasehold properties do not have this privilege.

2. Cost: In Dubai, freehold properties come at a higher price than leasehold properties, owing to the complete ownership rights they provide to the buyer. On the other hand, leasehold properties are relatively more affordable, but they do come with limitations on ownership and usage.

3. Responsibilities: Freehold property owners are accountable for the upkeep and maintenance of both the property and the land it sits on. On the other hand, leasehold property owners are responsible for maintaining the property, while the responsibility of maintaining the land rests with the landowner, which is typically the government or a property developer.

4. Restriction: Freehold property owners have the right to make any modifications or renovations to their property without requiring permission from anyone else, given that they own full rights to the property. In contrast, leasehold property owners must seek permission from their landowner before making any changes to their property, due to limited ownership rights.

5. Duration: Freehold properties have no expiration date and are owned indefinitely. On the other hand, leasehold properties are only owned for a predetermined period of time, usually ranging from 30 to 90 years, after which ownership of the property will revert back to the landowner unless the lease is renewed.

Freehold Properties in Prime Locations 

Dubai offers Freehold Properties in numerous locations across the city. Here are some prime locations:

  1. Dubai Marina: Dubai Marina is a highly sought-after location for Freehold properties, offering the ultimate in luxurious living and contemporary lifestyle. With its magnificent high-rise apartments and breathtaking waterfront views, it has become the epitome of opulence and sophistication.
  2. Downtown Dubai: This bustling area is home to the iconic Burj Khalifa and Dubai Mall, and is located at the heart of Dubai. This area includes several high-end apartments, luxurious penthouses, and villas, all of which are available as Freehold Properties.
  3. Palm Jumeirah: Famous for its luxurious resorts and upscale properties, this man-made, palm-shaped island is a symbol of elegance and exclusivity. The Freehold Properties available on this island include beachfront villas, apartments, and townhouses, offering the ultimate in luxurious living and serene surroundings.
  4. Jumeirah Beach Residence (JBR): a beachfront community in Dubai, is one of the most sought-after locations, thanks to its vibrant atmosphere and breathtaking views of the Arabian Sea. The Freehold Properties in this area include high-rise apartments and penthouses, which offer a luxurious lifestyle with a touch of coastal living.
  5. Arabian Ranches: a family-friendly community in Dubai, is renowned for its expansive villas and verdant landscapes, providing a tranquil escape from the bustling city life. The Freehold Properties in this area include an array of townhouses and villas, offering the perfect balance of luxurious living and serene surroundings.

     The decision to opt for either freehold or leasehold ownership ultimately comes down to personal circumstances and preferences. As highlighted earlier, freehold ownership offers greater flexibility and control, but it also comes at a higher cost compared to leasehold properties. If you are still unsure which ownership to choose, we are available for a one-to-one meeting to help you make an informed decision.


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