When you're buying a property — whether it's a flat, a plot, or a house — you'll often come across two words: Freehold and Leasehold. Most first-time buyers either ignore these terms or find them confusing. But understanding the difference between them is absolutely essential before you sign any document or pay any money.
At Axsiom Real Estate, we believe every buyer deserves to know exactly what they're getting into. So let's break it down in the simplest way possible.
First, Let's Understand What "Ownership" Really Means in Property
When you buy a property, you're not just buying the building or the flat — you're also buying rights over the land on which it stands. And this is exactly where freehold and leasehold differ.
What is Freehold Property ?
A freehold property means you own the property and the land it is built on completely and permanently. There is no time limit. No landlord above you. No annual rent to pay to anyone. Once you buy it, it's yours — for your lifetime and for your children's lifetime after that.
Think of it like this: if you buy a plot of land in Bhubaneswar and build a house on it, you own that plot outright. No one can come after 30 years and say, "Sorry, your time is up."
In simple words: Freehold = Full ownership. Forever. No strings attached.
Key Features of Freehold Property:
- You own the land and the building permanently
- No time limit on ownership
- No ground rent or lease charges to pay
- You can sell, rent, renovate, or gift it freely
- Easier to get a home loan from banks
- Higher resale value and market demand
What is Leasehold Property ?
A leasehold property means you own the building or flat, but not the land underneath it. The land belongs to someone else usually the government, a development authority, or a private landowner. You are essentially "borrowing" the land for a fixed number of years, which is written in a legal agreement called a lease.
Common lease periods in India are 30 years, 60 years, 99 years, or 999 years.
Once the lease period ends, the ownership of the land (and sometimes the property) goes back to the original landowner, unless the lease is renewed.
Think of it like renting a shop space in a mall. You own everything inside, but the mall owner owns the ground. You have rights, but they come with conditions and a time limit.
In simple words: Leasehold = You own the structure, but not the land. And only for a fixed time period.
Key Features of Leasehold Property:
- You own the flat or building, but NOT the land
- Ownership is valid only for the duration of the lease (e.g., 99 years)
- You may have to pay annual ground rent to the landowner
- Selling, renovating, or subletting may require permission from the landowner
- Banks may be cautious about giving home loans on short leasehold properties
- Resale can be more complicated
A Real-Life Example to Make it Clearer
Imagine two friends, Ramesh and Suresh, both buy flats in Bhubaneswar.
Ramesh buys a freehold flat. He owns his flat and the proportional share of the land under the building. He can sell it whenever he wants, renovate it freely, and pass it on to his children without any legal complications.
Suresh buys a leasehold flat on a 60-year lease from a government authority. He owns the flat but not the land. After 60 years, the lease needs to be renewed — or Suresh (or his children) could lose their rights over the property. He also needs to take permission for major changes and may pay a yearly ground rent.
Leasehold is Not Always Bad, Here's When it's Okay
Leasehold property sometimes gets an unfairly bad reputation. There are situations where it's completely acceptable:
- Government-allotted properties — Many DDA flats in Delhi, BDA plots in Bhubaneswar, or government housing schemes are leasehold by nature. These are generally safe because the authority behind them is reliable.
- Very long lease periods — A 999-year lease is practically as good as freehold for your lifetime and many generations after.
- Lower purchase price — Leasehold properties are often priced lower than freehold ones, making them more accessible for buyers on a budget.
The key is to check how many years are remaining on the lease and whether it can be renewed. A property with only 20 years left on the lease is a risky buy. A property with 90+ years remaining is much safer.
What's More Common in Bhubaneswar ?
In Bhubaneswar, you'll find both types. Properties under the Bhubaneswar Development Authority (BDA) are typically leasehold — allotted for 99 years with renewal options. Many private developments and independent plots in areas like Patia, Nayapalli, Acharya Vihar, Khandagiri, and Sundarpada are sold as freehold properties.
Always ask your builder or seller clearly: Is this property freehold or leasehold ? and get the answer in writing.
What Should You Choose ?
If you have the budget, freehold is almost always the better choice. It gives you full control, peace of mind, and stronger legal standing. Banks also prefer lending on freehold properties.
However, if you're buying under a government scheme, or the price of a leasehold property fits your budget significantly better and the lease period is long enough it can still be a smart decision. Just make sure you understand what you're signing.
Freehold and leasehold are not just legal jargon, they directly affect your ownership rights, your ability to sell the property in the future, and even your eligibility for a home loan. Before you invest your hard-earned money, always verify what type of property title you're getting.
At Axsiom Real Estate, we make sure our clients always understand what they're buying every document, every clause, every detail. We help you buy with confidence, not confusion.
Have questions about a property you're considering ? Reach out to the Axsiom Real Estate team in Bhubaneswar, we're happy to guide you.