What Is The Difference Between Freehold and Leasehold Properties In Dubai?

Dubai is a city on the rise. This powerhouse of the Emirates is home to some of the world's largest companies and offers expats a truly exemplary lifestyle, with sunshine practically guaranteed. It's a safe, vibrant community where families can grow and the next generation of entrepreneurs and leaders can gain an education that’s the envy of the world.

If all of that sounds tempting, you may be already planning to buy a property in Dubai. However, there are strict rules and regulations for buying property in the UAE. So, before you do a property investment in Dubai, you'll need to know the difference between freehold and leasehold properties in Dubai, as it can significantly impact your ability to apply for residency visas. In this blog, we'll look at both freehold and leasehold properties in the Emirate and where you can buy freehold properties to make this incredible destination your new home.

What Is A Freehold Property In Dubai?

Firstly, let's take a quick look at freehold property. This is a property that is owned outright by the individual. Under a freehold agreement, they also own the land on which the property is built, which typically applies to villas and homes rather than apartments. The freeholder's name has to be registered with the Dubai Land Department (DLD). The DLD also provides title deeds for the property, a requirement of Dubai property law.

It is important to remember that freehold properties can only be bought from government-approved agents and developers. This is to safeguard the interests of both buyers and sellers.

What Is A Leasehold Property In Dubai?

With a leasehold property, you do not technically 'own' the actual bricks and mortar or the land. Leasing means you're buying the right to live in a property and have reached an agreement with the legal owner (the freeholder). Leases usually run for 99 years or less, and you only have rights to the unit, not the land.

What Is The Difference Between Leasehold and Freehold Properties?

With a freehold, you own the property and the land it sits on outright (once the mortgage is paid off). With a leasehold, you do not have ownership of the land. That is the most fundamental difference between the two. There are, however, other more subtle differences.

For example, a leasehold property means that the landowner, not the property owner, is responsible for the property's maintenance, repairs and upkeep. However, this can come with some caveats. An additional charge may be made annually to cover maintenance costs, and you will require a permit to carry out any alterations in your home.

Leasehold properties are more affordable, but if you decide to sublet (for example, if your work takes you overseas for six months), you cannot allow another person to take a tenancy in your home without the freeholder's permission.

Freeholds, by contrast, have fewer restrictions as you actually own the property outright. You can make alterations and remodel without asking permission (as long as it falls within development guidelines), and you can sublet your property if you go abroad.

You can pass your property onto your children, and you are free to sell your property if you so wish.

The type of property you buy can have a big influence on your visa. If you want to live and work in the UAE, a way to achieve this is to buy a freehold property of a certain value. This will make you eligible for long-term residency visas of five to 10 years that can be renewed.

Where Can You Buy Freehold Properties In Dubai?

Freehold property in Dubai is located in specific areas. As the city has grown, the planners have had the foresight to build communities, not just houses. So developments include beautiful family homes, schools, shops, entertainment and leisure activities, as well as green spaces.

Some of the most desirable freehold properties are beachfront homes offering the best resort living. Locations such as Alaya Beach offer luxurious homes with bespoke touches, while Lanai Islands offers island living with the thriving city of Dubai within easy reach. Within the city itself, new developments such as The Sustainable City are exploring new ways of living using renewable energy sources and sustainable building practices. Along Dubai’s vibrant waterfront are exclusive developments such as The Lakes, Emirate Hills and the desirable Jumeirah Park.

If you’re looking for a freehold property in Dubai, remember that you will need to talk to an approved agent or developer. At Tilal al Ghaf, our portfolio of exclusive resort living allows you to live and work in Dubai with beautiful, family-friendly homes you'll fall in love with. Contact us for more information, or take a tour of some of our neighbourhoods to find your perfect home in Dubai.