What is Freehold Property? Full Detail Explained
When you buy a property, ownership is the most important factor. Most individuals frequently come across terms such as freehold property and leasehold property with no idea of what either of these two entails. Learning about these words will make you invest wisely and will save you from problems with the law in the future.
This comprehensive guide gives you an insight into what freehold property is, the definition, examples, pros, and cons of freehold property, as well as the difference between freehold and leasehold property. At the end, you will know clearly what kind of property will suit you.
What is Freehold Property?
Freehold property refers to an absolute ownership of the land, as well as the construction that is erected on the land. Simply put, when you own a freehold property, you have complete rights to it. You have the right to do with it as you please, whether to use it, sell it, rent it, transfer it, or bequeath it to your heir, without government or any other party restrictions.
Freehold ownership is permanent as opposed to leasehold property, where ownership is retained by the government or a housing authority over a certain period. You do not need to renew any lease or ground rent. In all legal ways, you are the actual owner.
Think of it this way:
When you purchase a freehold property, you are not only buying the right to live in that land but the land itself.
Key Points to Remember:
- The ownership is permanent.
- The property can be sold or transferred at any time.
- You can entirely control the modification or building.
- Your ownership cannot be restricted by any outside force.
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Legal Meaning of Freehold Property
Lawfully speaking, a freehold property is a property whose owner has the full title to the land and any structure constructed on it. Such rights are registered on the title deed of the property. When you get the property registered in your name, then you own it forever, and it does not expire.
Such ownership in India is governed by the Transfer of Property Act, 1882. The owner of a freehold is allowed under this law to:
- Utilize the premises in any legal manner.
- Assign ownership through sale or gift.
- Lease or rent it to others.
- Pass it to the legal heirs.
This type of permanent ownership offers security, permanency, and control, which makes freehold properties the best to own for both homeowners and investors.
Key Features of Freehold Property
The freehold properties have some special characteristics which distinguish them from other forms of ownership:
- Absolute Ownership:
You are the owner of the building and the land indefinitely.
- No Lease Renewal:
It is not necessary to renew ownership after a certain number of years, as it is the case with leasehold property.
- Easy Transfer:
You may sell or give the property away to whoever you wish.
- Freedom of Use:
You are at liberty to build, remodel, or expand the building according to the accepted standards.
- Permanent Rights:
And upon your death, the property will automatically descend to your heirs.
- Higher Market Value:
Freehold properties, most of the time, have a high resale value due to complete right of ownership.
- Easier to Finance:
Banking and other financial institutions find it more acceptable to fund freehold properties because the ownership is free and safe.
Freehold Property Example
This can be understood by a few easy examples to do with freehold property:
Suppose that you are buying a house in a residential colony, and the sale deed is clear that the land and building are sold to you forever. You get the property registered in your name. Freeholder, mean, you are the freeholder. You are able to sell, rent, or construct anything on it without obtaining any development authority permission.
Compare it now with a leasehold, for example – You purchase a flat constructed on land where the government has leased the land for 99 years. The land is still under the ownership of the authority. Only during such a period, you have the right to use it. Once the lease is finished, either renew it or give it back.
This case indicates the distinction between property rights and the leasing of usage rights.
Difference Between Freehold Property and Leasehold Property
Both freehold and leasehold properties exist in India, and understanding their differences is essential before investing. Below is a quick comparison:
| Aspect | Freehold Property | Leasehold Property |
| Ownership | Full ownership of land and building | Ownership is limited to the lease duration |
| Duration | Permanent | Usually 30–99 years |
| Control | Complete control | Limited control, bound by lease terms |
| Transfer | Direct and easy | Requires the authority’s permission |
| Renewal | Not required | Required after lease term ends |
| Value | Higher resale value | Lower resale value |
| Loan Approval | Easier to get | Some banks hesitate |
| Tax Liability | Paid directly by the owner | Often shared or pre-determined |
If you’re planning to live long-term or want a property for future generations, freehold property is the better option.
How to Check If a Property is Freehold
The ownership type should be checked before buying. Here is the way to find out whether a property is freehold:
Step 1: Review Property Documents
- Check the sale deed/title deed. It will indicate clearly whether the land is freehold or leasehold.
- In a freehold property deed, it will indicate that the ownership is being transferred fully.
Step 2: Check Mutation and Tax Records
- The ownership is indicated in mutation records at the local municipal office or land registry.
- Full ownership is also indicated through property tax receipts given in your name.
Step 3: Verify on Government Land Record Portals
Online verification is conducted in many states, such as Bihar. It is possible to check property information regarding the ownership type, khata number, and land classification on the Bihar Bhumi site.
Step 4: Consult a Legal Expert
Do not guess when it comes to property title ownership; seek professional assistance to verify that you are purchasing a property.
Advantages of Buying Freehold Property
A freehold property has many advantages, both financially and emotionally. Here are some key advantages:
1. Full Control
The property is free to use it in any way you want it to be used, whether it is to live or rent or even build.
2. Permanent Ownership
There’s no expiry period. Once bought, it belongs to you forever.
3. Higher Resale Value
Freehold properties are also more appealing to buyers due to ownership. They are simpler to sell at decent prices.
4. Better Financing Options
The banks actually like to give loans on freehold properties because of the clear titles.
5. No Renewal Fees
You do not have to pay periodic renewal charges or ground rent, unlike leasehold.
6. Safe Long-Term Investment
The freehold properties are assets that can be handed down through generations, as they provide some stability and wealth generation.
Disadvantages of Freehold Property
Although this type of ownership is the best, the freehold ownership also has its disadvantages:
- Higher Cost:
The leasehold property is usually cheaper than the freehold property in the cities.
- Limited Supply:
Most of the new projects in metro regions are developed using the land that has been leased due to space constraints.
- Maintenance Responsibility:
Maintenance, taxes, and adherence to the building laws are all your responsibility.
- Approval Process:
Even in the case you are intending to make significant structural changes, you will require local authority approvals.
Although these are the few drawbacks, they drawbacks are normally offset by the advantages of having a freehold property in the long run.
How to Convert Leasehold Property to Freehold
You can also be able to convert a leasehold property to a freehold property by undertaking the legal proceedings, in case you already have a leasehold property. In several state governments, this is permitted by an official procedure.
Step 1: Check Eligibility
The leaseholders who paid all their dues, such as ground rent and lease charges, qualify only as applicants.
Step 2: Apply for Conversion
Make an application to the local development authority or land revenue office on the basis of the conversion of leasehold into freehold.
Step 3: Submit Documents
You’ll need:
- Copy of lease deed
- Recent tax bill receipts.
- No Objection Certificate (where necessary)
- Identity proof of the owner
Step 4: Pay Conversion Charges
Governments impose a one-time conversion fee that is one-time, depending on the type and place of property.
Step 5: Acceptance of Freehold Title Deed
The new title deed will be a freehold title deed, and once approved, it will show permanent ownership.
This is done in a legal way whereby the title of the land is transferred to your name indefinitely.
Things to Consider Before Buying Freehold Property
These are some of the considerations to make when investing to make a safe decision:
- Confirm ownership by the purchase deed.
- Examine encumbrances or disputes.
- Have clear land titles on the property.
- Inspect the real estate location and establish boundaries.
- Check up municipal records on pending dues.
- Check Zoning (in case you are going to make up).
Conducting due diligence prevents legal issues in the future and ensures that you invest in real property.
Why Freehold Property is Preferred by Buyers
Freehold properties are mostly preferred by homebuyers and investors in India due to the peace of mind they provide. It does not need authorities, does not have a secret charge of renewal, and does not face the threat of depriving rights for several decades.
Freehold ownership is all about freedom, security, and stability, which are the three things that any property owner appreciates. Whether a small plot or a multi-storey building, ownership of your name on a freehold title is a long-term satisfaction and confidence in regard to the financial aspect.
Conclusion
Knowing what freehold property is is important to you in making sound real estate choices. It is not only about the purchase of land or a house, but possession of something wholly and for good. Freehold is the only ownership that has all rights, control over the long term, and can appreciate value with time.
When you are planning to purchase property in Bihar or any part of India, always make sure whether it is a freehold or a leasehold. The due diligence nowadays spares you the trouble in the future.
👉 To get the assistance of the professional checking land records, ownership status, and property documents, you may visit Bihar Bhumi Seva – your reliable online system of land-related services in Bihar.
FAQs About Freehold Property
1. What does freehold property mean in India?
Freehold property is one in which the buyer acquires the land and building and is the out and out owner. It has no time restriction or renewal. Simply stated, by purchasing a freehold property ownership, you get to own your property in totality, and there is total control and rights to the land.
2. Can a flat be freehold?
A flat may be a freehold land in this case, whereby the builder or the developer is the owner of the land and they sell or transfer the ownership to individual purchasers. After the registration of the sale deed, in the name of the buyer, the flat starts being a freehold property.
3. Is freehold property better than leasehold?
The freehold property is more generally preferable. It provides absolute ownership, control, as well as greater resale value. Leasehold property, on the other hand, has a defined duration of ownership, normally 30-99 years, and can be renewed in the future.
4. How do I check if my property is freehold or leasehold?
This can be verified by checking the sale deed of your property, the mutation record, or by just visiting the official site of your state land record. You can also be able to check the property ownership online via the portal of Bihar Bhumi for properties in Bihar.
5. Can leasehold property be converted to freehold?
Freehold acquisition can be turned into leasehold through the application to the relevant development authority or land department. To get a freehold title deed, the owner has to pay all the dues and the conversion fee.
6. What are the benefits of owning a freehold house?
Freehold property is the best option with a sense of total control, permanent ownership, high resale value, easy financing, and a feeling of security, as an individual is not reliant on a lease renewal.
7. Who owns the land in a freehold property?
The purchaser is the owner of the land and the building that is constructed in it, and he/she has all the rights to use, sell, or transfer the property.
8. Does freehold property have an expiry date?
No. The ownership of freehold does not expire. It is never-ending and can be transmitted to the next generations.
9. What documents prove freehold ownership?
Freehold ownership is verified by a registered sale deed, mutation certificate, and property tax receipts in the name of the buyer.
10. Is freehold property easy to sell?
Yes. It is easier to sell freehold properties since they are free of any ambiguity in terms of ownership and demand in the market.