Difference
Between Freehold and Leasehold Property in India
Introduction
When purchasing real estate, one of the most important
decisions is whether the property is freehold or leasehold. Many
homebuyers in India are unaware of the key differences, which can affect ownership
rights, resale value, and legal compliance.
This guide explains the difference between freehold and
leasehold property in India, their advantages and disadvantages, and
helps you decide which option is better for your investment.
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What is a Freehold Property in India?
A freehold property gives the buyer complete
ownership rights over both the land and the building.
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What is a Leasehold Property in India?
A leasehold property means the buyer only gets rights
to use the property for a fixed period, usually 30 to 99 years,
while the land ownership remains with the government or authority (such
as DDA, Noida Authority, CIDCO).
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Freehold vs
Leasehold Property: Key Differences
|
Feature |
Freehold Property |
Leasehold Property |
|
Ownership |
Full ownership of land & building |
Building rights only; land belongs to authority |
|
Tenure |
Unlimited, permanent |
Limited (30–99 years) |
|
Resale & Transfer |
Easy, with no restrictions |
Needs authority approval |
|
Bank Loans |
Easier to get |
Difficult if short lease remains |
|
Market Value |
Higher |
Lower resale value |
|
Control |
Full control to modify, sell, or mortgage |
Restrictions apply |
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Pros & Cons of Freehold Property
Advantages
Disadvantages
Pros & Cons of
Leasehold Property
Advantages
Disadvantages
Can Leasehold
Property Be Converted to Freehold?
Yes. Many state authorities allow conversion of leasehold
property into freehold.
Steps:
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FAQs on Freehold
vs Leasehold Property
Q1. Which is better – freehold or leasehold?
Freehold is better for long-term ownership, while leasehold is cheaper for
short-term use.
Q2. Can I get a home loan for leasehold property?
Yes, but banks usually finance only if the lease period is 30+ years
remaining.
Q3. Does leasehold property lose value over time?
Yes, as the lease term reduces, the resale value also declines.
Q4. Is it safe to buy leasehold property in India?
Yes, provided it is purchased from a reliable authority or developer
with proper legal due diligence.
Q5. Can leasehold flats be converted to freehold?
Yes, by applying for conversion and paying the required fees to the authority.
Conclusion
Understanding the difference between freehold and
leasehold property in India is crucial before making a purchase.
