What Is The Difference Between Freehold and Leasehold Properties In Dubai?

Dubai offers two main types of home ownership – freehold and leasehold. The one you choose will depend on your financial position, citizenship status, and what you're looking for in a property in Dubai. Do you want a chic apartment or a family villa? Is location all-important to you, or are you more flexible about where you live in Dubai? Are you a UAE national or an expat? 

All of these elements need to be considered before you think about buying a freehold or leasehold property in this vibrant city. Let’s take a closer look at the question, “What are the differences between freehold and leasehold properties in Dubai?” and what you need to know before you buy.

What Is A Freehold Property In Dubai?

The key factor with a freehold property in Dubai is that the person who buys it owns the property and the land it sits on outright. There is no ‘lease’ on the property – the deeds will be in your name, and you have absolute ownership of the property once you have completed payments on any loans or mortgages.

Ownership is indefinite – you can hold onto the property or sell it as you wish. If you want to ‘flip’ the property for a quick profit, you can – subject to developer/DLD procedures and fees - put it up for sale the day after you’ve completed all the paperwork and taken the keys. Likewise, if you want it to be your ‘forever home’, then it can be precisely that.

What Is A Leasehold Property In Dubai?

The key difference with a leasehold property in Dubai is that you own the ‘lease’, and not the land the property sits on. That lease is for a fixed term, usually up to 99 years, although it will depend on how long the lease has been in place. You may purchase a property with a lease of 80 years or less, depending on the property's age.

With a leasehold property, you have a fixed-term ownership that can be between 30 and 99 years, so if there’s a long period left on the lease, they do represent a secure and stable investment.

A lease can be renewed, but if it isn’t, then the land and any property on it reverts to the possession of the freeholder (the person who owns the land).

What Is The Difference Between Leasehold and Freehold Properties?

The primary difference between leasehold and freehold properties lies in the ownership of the property. With a freehold purchase, the person who has bought the property owns it and the land it's built on outright. With a leasehold, you only technically own the right to lease the property for a set period.

There are also other issues regarding what you can and cannot do in a leasehold property compared to a freehold home. With a leasehold, you may have to get permission from the freeholder to make any alterations or modifications to your home. That can range from relatively simple changes to significant structural alterations. 

Where Can You Buy Freehold Properties In Dubai? 

In 2001, Dubai became the first emirate to allow foreigners and expats to own leasehold property in designated areas or zones. In 2002, those rights extended to ownership of freehold properties. Today, that means if you’re an expat, you can purchase freehold property in Dubai but only in designated Freehold Zones like Ghaf Woods. 

There are areas in Dubai where you can only purchase a freehold property if you are a UAE citizen. Your options are limited, but Freehold Zones are designed to attract expats to buy freehold rather than lease or rent, and to put down roots in the Emirates. So, developments are exceptionally well presented with a wide range of options on offer.

Freehold properties are excellent if you’re looking for a long-term property investment and full control over your purchase, including when you can sell on. While leasehold properties in Dubai are cheaper than freehold ones, the restrictions for expats on where you can buy will limit your scope. However, the quality of Freehold Zone properties is very high, with a real emphasis on creating sustainable communities where everyone feels included and welcome.

If you want to know more, including how to check freehold properties and if their location makes them available to you as an expat, get in touch with Ghaf Woods today, or browse our online catalogues detailing the attractive homes we have available to buy in Dubai.