Difference between a freehold and a leasehold property

freehold and a leasehold property

Making an important property purchase decision in Australia requires a detailed understanding of the differences between freehold and leasehold property. These two terms determine the level of control and rights over the property and the land it occupies. Here’s what you need to know, specifically for the Australian real estate market.

Freehold Property

Freehold property is a type of ownership that is “free from hold” meaning the owner has no time restrictions on their ownership. Also known as Torrens Title in Australia, it is the most common and highly sought-after form of property ownership. 

Freehold property provides absolute ownership, granting the right to sell, lease, and utilise the property without significant restrictions beyond local planning regulations. Besides complete ownership, a freehold property offers: 

Long-Term Security: As there is no limit to ownership, freehold property offers stability and security to an individual. 

Flexibility: One has complete control over their property until they own it. You can lease, sell or even alter your property as you desire. 

Growth and Potential: The potential for long-term investment growth is a key advantage of freehold property. Land values tend to appreciate over time, leading to higher resale values offering capital gains. 

Continuation of Legacy: As an inheritance, freehold properties are readily transferred to the next generations. 

Leasehold Property

In leasehold ownership, the owner has the right to occupy and use the property but does not own the land. The timeframe is fixed for the ownership also limiting the rights. 

Signing the lease contract constitutes an agreement between the lessee and the landowner typically the state government. The contract includes ground payments, lease duration and any restrictions on the property. Despite having less control, leasehold ownership still offers some advantages.

Affordability: Leasehold properties are typically more affordable than freehold properties, making them a viable choice for first-time homebuyers.

Lower Maintenance: The responsibility for maintaining common areas, including roads and gardens, lies with the freeholder. As a leaseholder, you won’t be responsible for the cost of maintenance and repairs. 

Peace of Mind: Leaseholders benefit from peace of mind as they do not have to worry about property maintenance. 

Freehold or leasehold property?

Freehold properties are often better for buyers looking for long-term security and flexibility. However, leasehold properties appeal to those seeking access to high-demand areas or reduced upfront costs.

For expert advice on navigating the complexities of the Australian property market, trust Sapphire Real Estate to guide you through the process and help you find the right property to meet your needs.

Contact Sapphire Real Estate today to start your property journey!

Disclaimer



This information is for general informational purposes only and is not intended as professional advice. While we strive to present accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the content provided.



Real estate transactions and financial decisions involve complex considerations that may vary based on individual circumstances. Do not consider the content provided as a substitute for professional advice tailored to your specific situation.



Conducting thorough research and consulting with licenced and experienced professionals in the relevant fields is crucial. Every individual’s financial and real estate situation is unique, and professional advice is essential to making informed decisions.

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