Freehold vs. Leasehold: Differences for Expats Buying Property in Dubai

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  • 2 months ago
  • Buying Property in Dubai, Dubai Properties, Dubai Real Estate, Real Estate 2023,
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Freehold vs Leasehold

Leasehold Properties Typically Have A Lower Initial Purchase Cost Compared To Freehold Properties.

As an expat looking to buy property in Dubai, understanding the differences between freehold and leasehold ownership is crucial. Both options have their benefits and drawbacks, and it is essential to weigh them carefully before making a decision.

Freehold Ownership

Freehold ownership gives you absolute ownership of the property and the land it is built on. This means that you can sell, lease, or occupy the property at your own discretion. As the owner, you are also fully responsible for the maintenance and upkeep of the building and the land.

One of the main benefits of freehold ownership is the freedom it gives you to make changes and upgrades to your property without seeking approval from anyone else. However, it is worth noting that you may be subject to local building codes and regulations.

Leasehold Ownership

Leasehold ownership means that you own the property rights for a fixed term, which is usually up to 99 years. However, you do not own the land on which the property is built, and the total ownership of the land goes back to the freeholder. While the initial cost of purchasing a leasehold property is often lower than that of a freehold property, you will be subject to ground rent and service charges, which can increase over time.

Another disadvantage of leasehold ownership is that you will be subject to the terms of the lease, which can limit what you can do with the property. Any upgrades or alterations you would like to make to the property require written approval from the freehold owner. Additionally, you may face other restrictions, such as limitations on subleasing the property or owning pets.

Escrow Accounts

When buying property in Dubai, expats are often required to use an escrow account to deposit their funds. An escrow account is a third-party account that holds the buyer’s funds until the transaction is complete. By using an escrow account, buyers are protected if the sale falls through, as the third-party managing the account can return the funds to the buyer without involving the seller.


In conclusion, both freehold and leasehold ownership have their benefits and drawbacks. As an expat looking to buy property in Dubai, it is essential to carefully consider the specific property and the terms of the lease before making a decision. Additionally, using an escrow account can provide added protection for buyers and reduce financial risks.

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