A leasehold property is a property where the buyer is given the right to own the property for a specified tenure (30 years to 99 years). Usually the owner of the property is the government or local development authority. The builders are given rights to build projects on a leasehold basis. Those who buy properties in a leasehold land own the rights to it only till the leasehold tenure. Once the lease period expires, the property rights go back to the owner.
Advantages and disadvantages of leasehold propertySome of the pros and cons of a leasehold property are:
1.The overall initial investment is lesser under the leasehold agreement with the owner as the buyer can avoid upfront cost, therefore reducing the overall cost of the project.
2.A leasehold buyer enjoys tax benefits as they don’t have to pay income taxes and state taxes.
3.The overall responsibility of the property is with the landowner and the tenant only uses it for a certain number of years.
But some of the cons of leasehold property are:
1.Tenants do not have access to the whole property and landlords put some restrictions.
2.A leasehold property is a lot more difficult to sell than a freehold property.
3.It is hard to get a loan on the leasehold property as banks perform an extensive background check.
How is it different from freehold?The major difference between a freehold property and a leasehold property is that a freehold property belongs to the buyer completely, whereas a leasehold property belongs to the state and is leased for a certain number of years. The transfer of ownership in case of a leasehold property needs state’s approval, whereas in a freehold property there is no such obligation.
How to convert from leasehold property to freehold property?To convert a leasehold property into a freehold property, the buyer must have legal documents like Power of Attorney, Sale Deed, and NOC. The buyer also has to pay the conversion charges to the authorities.
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Authors Of The Question
What is a leasehold property?
Ekta Rairikar
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1 Answers
3 Year
2021-03-04T10:33:05+00:00 2021-03-04T13:23:57+00:00Comment
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