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Leasehold vs. Freehold: The Property Ownership You Need to Know

Published on June 20, 2023

Introducing you into a few essential real estate terminologies! Have you scrolled through outstanding villa listings and found terms like “leasehold” and “freehold” quite some times? Within the real estate discussion, these two terms describe the forms of property ownership, each of which carries a unique set of obligations and privileges. Let’s see how they are different and which would be the best one for you.


Leasehold: A Time-Bound Ownership

Leasehold ownership represents the possession of a property for a long specified rent period. By common practice, most of the lease would be between 20 years up to 30 years lease with extension possibility which is outlined in a lease agreement between the property owner and the leaseholder (also known as the tenant). In leasehold arrangements, the leaseholder has the right to occupy and use the property for the duration of the lease.


Freehold: Absolute Ownership and Control

Freehold ownership refers to the most complete form of property ownership. It would mean that when someone owns a property freehold, they have full and indefinite ownership rights over both the land and any structures on it. 

This form of ownership is commonly applied for local citizens. However as a foreigner, definitely there would still be a possibility to buy a property in freehold title. But how does it work? It would require you a PT PMA ownership and your property would be purchased as an asset of your PT PMA. Another way possible is through the Hak Pakai system for KITAS holders where the property purchased is bound to your KITAS.


Leasehold vs. Freehold: Which Would be the Best for You?

Before deciding which one of property ownership would be the best option, it is crucial to truly consider your long-term goals as well as your individual circumstances. Indeed leasehold properties may offer a more affordable entry point and are suitable for shorter-term needs, yet freehold ownership might provide greater autonomy and investment towards a wider range of audiences.

While each type of ownership would have its own benefits and considerations, carefully evaluating your needs and long-term plans would be very essential before making a decision in real estate purchasing. Ready to start a further discussion? Let’s consult with us!

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