When it comes to buying property in India, one of the key legal distinctions every buyer must understand is whether the property is freehold or leasehold.

This classification impacts your ownership rights, future resale value, loan eligibility, and overall legal control over the property.

In this blog, we will explain the difference between freehold and leasehold property, their
pros and cons, and how they impact your decision as a buyer or investor.

What is a Freehold Property?

A freehold property means complete ownership of both the building and the land it stands on.
The buyer has full legal rights to transfer, sell, lease, or modify the property, subject to local laws
and regulations.

Key Features:

• Full ownership of land and structure
• No lease or periodic renewal involved
• Owner has indefinite rights to the property
• Easy to sell, transfer, or renovate
• Usually higher in value and demand

Example:

Independent houses, bungalows, and plots sold by development authorities or private sellers are
usually freehold.

What is a Leasehold Property?

A leasehold property means the buyer gets the right to use the property for a fixed period,
usually 30 to 99 years, as per the lease agreement. The land is still owned by the government or
a land-owning authority.

At the end of the lease period, ownership typically reverts back to the lessor unless the lease is
renewed.

Key Features:

• Land ownership remains with the lessor (often government or authority)
• Buyer gets only the right to occupy for a fixed term
• Renewal may be required after lease ends
• Limited rights to make structural changes
• Resale and loan processes can be more complex

Example:

Flats or plots allotted by government bodies like DDA, MHADA, or Noida Authority are often
leasehold properties.

Major Differences at a Glance

Should You Buy Freehold or Leasehold?

Choose Freehold If:

• You want full control and permanent ownership
• You are buying for long-term use or family inheritance
• You plan to resell or renovate in the future

Choose Leasehold If:

• You’re investing with a smaller budget
• You are aware of lease conditions and willing to comply
• You’re buying in a high-demand government-allotted area

Can Leasehold Property Be Converted to Freehold?

Yes, in many cases, leasehold properties can be converted to freehold by paying a conversion
fee to the local authority. The process and cost vary by state and authority, and it often requires:

• No dues certificate
• Lease agreement
  • `Identity and ownership documents