Freehold Vs Leasehold Properties in Dubai | Fidu Properties

Freehold Vs Leasehold: What should you choose?

Buying property involves a significant financial commitment therefore understanding the fundamentals and regulations surrounding the two forms of property ownership in Dubai is crucial for home buyers to make an informed decision. 

Freehold Property in Dubai

The introduction of the 'Freehold Decree' in 2002 paved the path for expats to legally buy, sell, rent and lease property in specified locations over Dubai. With over 70% of this country's population being expats it was in Dubai's best interest to direct all investment opportunties towards the country itself. 

The freeholder of a property claims it through and through, including the land it's based on. In the event that a buyer purchases a freehold properties in Dubai, they would be answerable for keeping up the property and land, which would require them to finacially plan out their expenses. 

Most houses are on freehold property yet some may be leasehold – typically through shared-possession plans. Purchasing freehold in Dubai will furnish the proprietor with unlimited oversight over both the unit and the land.The freehold property will remain in the family and will give to a beneficiary when the proprietor dies.

Leasehold property in Dubai

With leasehold, the property is taken on lease from the freeholder for a period of 99 years after which the ownership reverts back to the freeholder. 

But it's important to understand that in the eyes of the law, you're essentially a tenant of the freehold properties for sale in Dubai. Also, you don't technically own the property, you own the lease – even though you can obviously buy and sell the physical property.

Under any event of remdoelling or renovations leaseholders a green signal is required from their freeholders although the latter is usually responsible for any repairs that impact the property. 

What is the right choice for you?

The government's decision to offer 2 year renewable visas to freeholders (and their family) investing more than 1million AED has actively encouraged foreign investment in the country. Additionally freeholders have total ownership and control over their land. 

Leaseholders enjoy limited liability when it comes to repairs to the structure of the property and refrain from incuring additonal costs in this aspect. A substanial variety of leasehold properties are made available to buyers to have their pick from and they also have the option of renewing their contract at the end of the 99-year period. 

Buyers have to ultimately decide whether they want more control over their property or investment for long term goals. In order to make an informed decision, buyers have to educate themselves over the responsibilities that each ownership type entails. 

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