In India, there are two major types of property ownerships i.e. freehold and leasehold properties. The major difference between freehold and leasehold property in India is the ownership tenure.
In case of a freehold property, the land ownership stays with the owner for an indefinite period of time. Whereas, in a leasehold property, the ownership of the land stays with the owner for the period mentioned in the ‘lease agreement’.
Usually it is for 99 or 999 years depending on the competent authority that is governing the property. To give you an example, the land parcels in Hinjewadi phase 2 and phase 3 are leased from MIDC for a period of 99 years by the developers.
Difference Between Freehold and Leasehold Property in India
What Is A Freehold Property?
Freehold property is a type of ownership in terms of a property title. In a freehold property, you have the rightful ownership for an indefinite period of time. The one who has the title of such a land parcel can make any alterations to the property, or sell it with less approvals.
They may have to take approvals from the municipal corporation or the governing authority if they want to make any structural changes but while selling the property, they need not take anybody’s approval or NOC.
Also Read: What is the difference between PMC and PMRDA?
Advantage and Disadvantages of a Freehold Property in India
|Advantages of Freehold Properties||Disadvantages of Freehold Properties|
|Indefinite ownership period||Usually slightly expensive than leasehold properties|
|Less approvals for structural changes||Owner is responsible for the maintenance|
|Easy process for resale and inheritance|
What Is A Leasehold Property?
A leasehold property on the other hand does not entitle the owner for an indefinite ownership. The lease period is usually for 99 years or 999 years and the owner must renew this lease at a nominal cost after the completion of this tenure.
If the owner wants to sell this property, he may need to take an NOC from the lessor (the one who has leased the property to him). Usually this NOC has a nominal fee and is a simple process.
Advantage and Disadvantages of a Leasehold Property in India
|Advantages of Leasehold Properties||Disadvantages of Leasehold Properties|
|The lessor is usually responsible for the maintenance and infrastructure development||Need to go through the process of renewal|
|Slightly less expensive than freehold properties||NOC Charges while transferring the property|
Now that you know the basic difference between freehold and leasehold property in India, let us look at some FAQs regarding the same: