Leasehold VS Freehold Property Ownership in Dubai

May, 2023


Dubai’s real estate market is known for its rapid growth and development. It attracts many foreign investors worldwide due to the friendly laws and regulations it offers to facilitate owning a property in Dubai. It is worth noting that Dubai was the first emirate in the UAE to allow foreigners to own a property. It specified two types of property ownership; leasehold and freehold. Let’s find out together everything you need to know about leasehold VS freehold property ownership in Dubai.

Leasehold Property Ownership

In 2001, the Dubai Government gave foreigners the right to own a property on a leasehold basis. A leasehold property is a type of property leased from the legal owner for a fixed period of a maximum of 99 years. The buyer of this type of property has rights over the property itself, but not on the land that it is built on. After the lease period is over, the ownership will be reverted back to the legal property owner.

Advantages of Buying a Property on a Leasehold Basis:

• The contract can be renewed, and the buyer can continue to live in the property.
• The leaseholder has limited responsibility for repairs if he causes damages to the property, but all maintenances and the overall upkeep of the property falls on the legal owner.
• The prices of leasehold properties are more affordable.

Things You Should Consider:

• If the leaseholder wants to renovate, remodel, or make any changes to the property, he must take approval from the legal owner.
• Leaseholders face restrictions regarding the subleasing of the property or owning pets.
• Buyers can purchase leasehold properties from certain areas, such as Dubai Silicon Oasis and Green Community and as well as freehold areas which we will get into details below.


Freehold Property Ownership

In 2002, the Dubai Government passed a law allowing foreigners to buy a property in Dubai on a freehold basis. But what is a freehold? It is a type of property ownership in which the owner has complete ownership over the property and the land it is built on without any time restrictions.

Advantages of Buying a Property on a Freehold Basis:

• The Dubai Land Department (DLD) considers the buyer as the landlord of the property, writes his name in the registry, and gives him the title deed for the property.
• The property can be inherited by the owner’s heir.
• The property owner has the right to:
- Purchase any ready or off-plan properties in freehold areas specified by the government, such as Downtown Dubai, Dubai Marina, Business Bay, and Palm Jumeirah.
- Renovate, remodel, and make changes to the property’s structure as he wants.
- Sell or lease the property and benefit from a high ROI.
- Obtain a residency visa by investing in a property in Dubai based on the amount of money he is willing to invest.

Things You Should Consider:

• The freehold properties must only be bought from government-approved real estate agents and developers.
• The owner is fully responsible for any property maintenance and repairs.
• The prices of freehold properties are more expensive in comparison to leasehold properties.

If you want to know more about freehold property ownership and freehold areas, you can check our article “Everything you Need to Know about Investing in Freehold Properties in Dubai”.

freehold property in dubai

A Comparison Between Leasehold and Freehold property Ownership

Points of Comparison Leasehold Freehold
Buyer’s rights of ownership Rights over the property only Complete ownership over the property and the land it is built on
Ownership period Fixed period of a maximum of 99 years and can be renewed No time restrictions
Responsibility for property’s maintenance and repairs Limited responsibility Full responsibility
Prices of properties More affordable Expensive
Possibility of remodeling or renovating the property Leaseholder must take approval from the legal owner Freeholder is free to do whatever he wants
Areas you can buy properties from Dubai Silicon Oasis, Green Community, and freehold areas Freehold areas, such as Downtown Dubai, Dubai Marina, Business Bay, and Palm Jumeirah

Now you have full knowledge of the difference between leasehold and freehold property ownership in Dubai, but the decision of investing in which falls on your budget and which will serve you more benefits. If you want to invest in a property in Dubai, contact RE/MAX UAE by calling +971 4 589 7376 or contact us here.