Dubai’s real estate market has been performing exceptionally well in recent years, not only becoming a trend within the UAE but also gaining global attention. The city’s growing popularity is driven by several factors, including investor- and homebuyer-friendly government policies, high living standards, diverse business opportunities, strong infrastructure, and much more.
The real estate authorities have implemented a decision to support investors and buyers in off-plan property transactions by introducing escrow accounts, a tool designed to build transparency and trust.
Freehold Ownership in Dubai:
Under this type of property ownership, you gain complete ownership of both the land and the property, without any restrictions. According to Dubai’s real estate laws, the Dubai Land Department will register the buyer or investor’s name as the official property owner and issue an ownership certificate.
In freehold property, the ownership is permanent under freehold law. When the property owner passes away, the ownership can be transferred to a family member.
In addition to expats, foreigners can also purchase off-plan properties, which fall under the freehold category. However, it’s essential to buy such properties only through government-approved real estate agents or developers.
Advantages of Purchasing Freehold Property in Dubai
- When a buyer purchases a freehold property, they become the complete owner of both the land and the structure built on it. The buyer also has the right to renovate or rebuild the property as they wish.
- Owners of freehold properties often enjoy significant financial returns.
- If you purchase a property under the freehold system, you have the freedom to sell it, lease it out, or occupy it as you choose.
- In freehold property ownership, the owner and their family may be eligible for a renewable visa, provided certain conditions are met. In the UAE, freehold property owners with long-term residency may also qualify for a 5- to 10-year visa.
- In the case of freehold property, if the owner passes away, the property will be transferred to the eligible family member in accordance with inheritance laws.
- Another advantage of freehold ownership is the wide variety of property options available to buyers. Dubai’s freehold areas provide a diverse selection of properties to match different budgets and preferences.
Disadvantages of Freehold Property Ownership in Dubai.
Limited Availability: Freehold properties are not available in all parts of Dubai. High-demand areas often have restricted options, so choosing freehold ownership may require flexibility with your preferred location.
Leasehold Ownership in Dubai.
In a leasehold arrangement, you purchase the right to live in a property for a specific period, similar to a long-term lease. In this process, you own the property itself, but not the land. The typical leasehold term is around 99 years, although it can be shorter.
When the leasehold term expires, the ownership of the property reverts to the freehold owner.
Advantages of Purchasing Leasehold Property in Dubai.
- If you purchase a leasehold property in Dubai, you are responsible for any minor repairs to the property. However, in most cases, the freehold owner is responsible for any major maintenance, including plumbing, especially if there are changes made to the property’s design.
- If the leasehold term expires, it can be renewed, allowing the tenant to continue living in the property.
- Leasehold properties are generally budget-friendly.
Disadvantages of Purchasing Leasehold Property in Dubai.
- Subletting the property may be prohibited under certain leasehold conditions.
- If you are buying a leasehold property in Dubai and wish to make changes or renovate, you must obtain written permission from the leasehold owner.
Difference between freehold and leasehold property.
Now that we have a clear understanding of freehold and leasehold properties in Dubai, it’s time to explore the key differences between the two.
In 2001, the Dubai government allowed foreigners to own property under leasehold arrangements, and in 2002, the law was passed to enable foreign ownership based on the freehold system. Dubai was the first emirate in the UAE to permit foreigners and expats to own property in designated areas.
The main difference between freehold and leasehold property in Dubai lies in the rights granted to the buyer. Let’s take a closer look at the differences:
Leasehold property: When you purchase a leasehold property, you have ownership rights for a specific period, typically around 99 years or less. In this arrangement, you only own the property unit, not the land. Once the lease term expires, ownership reverts to the original freehold owner.
Freehold property: When you purchase a freehold property, you gain full ownership of both the property unit and the land. You can then sell the property or rent it out as you wish.
Freehold vs Leasehold: FAQ
Q. Can Foreigners Own Freehold Property in Dubai?
Ans. Yes, foreign nationals are allowed to own freehold property in Dubai’s designated areas. These zones have been set by the UAE government to grant full ownership rights to non-UAE residents.
Q. Are Service Charges Different Between Freehold and Leasehold?
Ans. Yes, generally: Freehold properties have clearly outlined service charges managed by Owners’ Associations. Leasehold properties usually have service charges included in the lease or set by the master developer.
Q. Where can I buy Freehold property in Dubai?
Ans. As one of Dubai’s most reliable real estate agencies, Auxilium Real Estate invites you to explore our office and browse the freehold property listings through the links below:
Q. Is Buying Leasehold Property in Dubai a Good Idea?
Ans. Buying leasehold property in Dubai can be a smart choice under certain conditions, as noted by the Dubai Department of Economy and Tourism. It may be worth considering if:
- Your investment timeline is short to mid-term (around 5–15 years)
- The leasehold price offers a notable discount, usually 20–30% less than freehold.
- The property is in a high-demand area where freehold options are limited.
- The lease duration is significantly longer than your planned investment period.
- There’s a clear possibility of converting to freehold in the future.
Q. Where can I buy leasehold property in Dubai?
Ans: Auxilium Real Estate proudly stands as a dependable real estate partner in Dubai. Stop by our office or explore the leasehold property options:
- Dubai Silicon Oasis
- International City
- Dubai Sports City
- Discovery Gardens
Q. Where can I enter into a lease agreement for a property in Dubai?
Ans. If you’re interested in purchasing a leasehold property in Dubai, you can explore various locations across the city. To get more information and guidance on available leasehold properties, feel free to contact us at +971 54 457 0215. Our team will assist you in finding the right property that suits your needs and preferences.
Making the Right Choice: Leasehold vs Freehold Ownership in Dubai.
When buying a leasehold or freehold property, it’s essential to understand all the key details. The main difference between freehold and leasehold property is the extent of ownership rights. In a leasehold property, the ownership typically lasts for 99 years, and the owner has limited control over the property. In contrast, freehold property provides the owner with full authority and power, allowing them to make changes and renovate the property as desired.
When purchasing a property, it’s crucial to consider your plans before deciding between leasehold and freehold. Along with your long-term goals, budget, and intended use of the property, it’s also important to take into account the property’s features and its location when making your decision.
In short, both leasehold and freehold properties offer benefits, but the key is to determine your investment goals. You must carefully review all the conditions when buying property in Dubai. This is an important step when purchasing either a leasehold or freehold property.
