Freehold vs Leasehold Properties in Dubai: Whats the Difference?

Dubai, a city with long-term vision, steady growth, and infinite potential, is not only home to amazing and high-rise skyscrapers but also to investors interested in investing in Dubai real estate.

With a wide array of luxury properties and flexible government policies, Dubai has become a hub for foreign investors. This city is a growth catalyst for the future, boasting its strategic location, luxury lifestyle, tax-free environment, state-of-the-art infrastructure, and flexible government policies to attract investment opportunities from across the globe and become a major hub for innovation and creativity. 

If everything mentioned above about Dubai excites you, you may already be looking to invest in Dubai’s real estate and start a new life! However, before making an investment plan, it’s important to understand the rules and requirements that must be followed and implemented. So, before investing in the real estate market of Dubai, it’s important to know the difference between leasehold and freehold properties in Dubai!

In this blog, we’ll learn about both these properties and some of the best areas to find freehold and leasehold properties.

Let’s begin with;

What is a Freehold Property?

Freehold property is a type of property in which the owner gets complete control of the property and enjoys 100% ownership rights. In this type of property, property owners are not restricted to any lease term or duration. The term "freehold" was introduced by the Dubai government to attract foreign investors to invest in their dream home in Dubai.

You can consider Dubai's freehold areas if you wish to invest in Dubai's real estate. By investing in Dubai real estate, you can get 100% ownership of the property and enjoy complete control and rights.

Some of the most desirable freehold areas in Dubai are:

• Business Bay
• Downtown Dubai
• Dubai Silicon Oasis
• Dubai Sports City
• Jumeirah Lake Towers
• Jumeirah Beach Residence
• Palm Jumeirah
• Jumeirah Village Triangle
• Al Furjan
• Emirates Hills, and many more

Before making the decision to invest in Dubai's real estate, certain factors need to be taken care of. The factors include floor plans, kitchen, furnished, unfurnished apartments or villas, or any other facilities.

Before selecting a perfect area for investing in Dubai properties, it’s important to consider certain factors such as amenities, facilities, floor plans, and proximity to supermarkets, educational institutions, medical facilities, and many more. Not only this, but you must be aware of some of the advantages of owning a home in Dubai’s freehold areas.

Advantages of Freehold Property in Dubai

100% Ownership & Complete Control Over the Property 

With freehold ownership, buyers enjoy 100% ownership and complete control over the property. Full control means that you can easily modify, lease, or resell the property without taking permission from third parties. But, you need to keep in mind that the property must comply with the rules and regulations laid by the Dubai Municipality.

Eligibility for the UAE Golden Visa

Becoming eligible for the UAE Golden Visa is yet another advantage of investing in a freehold property. This visa comes up with the option of long-term residency, usually for 5 to 10 years, thereby eliminating the need for frequent renewals.

Note* To apply for the UAE Golden Visa, an investor’s capital is no less than AED 2 Million. 

High Capital Appreciation

Freehold properties usually appreciate with time. Therefore, these properties are well-suited if you are looking for high capital appreciation.

Profitable Option for Foreign Expatriates

Freehold properties are an attractive choice for foreign expats, instilling a sense of security and safety in a foreign country. So, if you are a foreigner looking forward to investing in Dubai real estate, freehold properties are the best option.

What is Leasehold Property?

Leasehold Property is a type of property in which you get the right to own property for a fixed period of time, say for example, long-term lease. Usually, the lease term is for 99 years; however, in some instances, it can be less.

When you purchase this property, you get the rights of the buyer but not of the land it’s built upon. On completion of the leasehold period, the rights of the buyer get transferred to the real freehold owner. On the other hand, if you want, you can renew the contract of the leasehold property.

If you take a property on lease, you are not allowed to make any renovations or revamping as permission from the freeholder is mandatory. Some of the most desirable leasehold areas in Dubai are:

• Mirdif
• Deira
• Al Barsha
• Umm Sequim
• Al Warqa
• Dubai Silicon Oasis, and others

Some Advantages of Owning a Leasehold Property Are:

Minimal Initial Payment

Leasehold Properties generally come with low initial costs, making them an attractive choice for people with budget constraints.

No or Low Maintenance Hassle

When you invest in a leasehold property, you can be assured that you will face no or low maintenance hassle. Maintaining the property is the responsibility of the freehold owner unless and until you are responsible for the damage.

Benefits from the Developers

Some developers offer benefits for the buyers of leasehold properties. These benefits include attractive rental income or flexible payment plans.

Easy and Hassle-Free Renewal of the Leasehold Agreement

Many of the leasehold agreements are fixed. However, some come with the option of renewal, and buyers can renew the leasehold agreement.

Freehold V/S Leasehold Properties! Which one to choose?

Your financial stability or power is the deciding factor when it comes to investing in Dubai real estate. It doesn’t matter if you are a local Emirati or a foreign expat; it’s crucial to monitor the Dubai real estate market trends and get consultation from the best real estate developers in Dubai.

Those who are not afraid of budget and can go with the freehold options. With freehold property, you get complete control over the property, which allows you to renovate or revamp your home at any time of the day.

On the contrary, if you have financial or budget constraints, you can always go for leasehold properties. With leasehold options, you will not get 100% control of the property, but you’ll save a lot of money on hassle-free investment in the future. But before you make a decision, having the right real estate professionals in Dubai will help you sail the boat in the right direction.