Freehold vs Leasehold Property Around the World: An Investor's Guide

When you buy property in the UK, the distinction between freehold and leasehold is familiar — you own a house outright or you hold a flat on a lease with a specified number of years remaining. Internationally, the picture becomes considerably more complex: some countries prohibit foreign freehold ownership of land entirely; others operate hybrid systems; and the terminology that appears in sales contracts can mask the practical limitations of the right you are actually acquiring.

This guide explains the key tenure structures across all eight markets, with a specific focus on what foreign buyers can and cannot own, and the investor checklist that should accompany any leasehold acquisition.

---

Definitions

Freehold: You own the land and all buildings on it, in perpetuity. There is no expiry date on your ownership. You can build, modify, sell, or pass on the property without a third party's approval (subject to planning law).

Leasehold: You own the right to occupy and use the property for a fixed period — the lease term. At the end of the lease, the right reverts to the freeholder/landowner unless extended or renewed. The leaseholder can typically sell or mortgage their interest, but the diminishing term affects value.

Key risk with leasehold: The shorter the remaining lease, the less your interest is worth, the harder it is to finance, and the more the freeholder's negotiating position strengthens.

---

United Kingdom

Structure: Houses are predominantly freehold. Flats are predominantly leasehold. Freehold flats exist but are relatively uncommon.

Lease lengths: New-build leasehold flats are typically issued with 125 or 999-year leases. Older stock may have shorter remaining terms. Under 80 years is the critical threshold: below this, mortgage lenders become reluctant, and the cost of lease extension rises sharply (the "marriage value" — the uplift in the property's value from the extension — must be shared with the freeholder once the lease drops below 80 years).

Ground rent: Historic leasehold ground rents ranged from a few pounds ("peppercorn") to hundreds or thousands of pounds per year, sometimes with doubling clauses. The Leasehold Reform (Ground Rent) Act 2022 prohibited ground rents above a peppercorn on new residential leases; older leases remain subject to original terms.

Reform: The Leasehold and Freehold Reform Act 2024 made significant changes, including making it easier and cheaper to extend a lease or purchase the freehold (enfranchisement). The full effect of these reforms is still working through the market.

Investor checklist for UK leasehold:

• Remaining lease term (flag anything under 100 years for further assessment; act urgently if under 80)
• Ground rent amount and any review mechanism
• Service charge history (3 years minimum) and sinking fund balance
• Section 20 major works notices outstanding
• Restrictions on subletting (relevant for buy-to-let)

---

Dubai (UAE)

Structure: Dubai divides property into designated freehold zones and non-freehold areas. In freehold zones (over 100 designated areas including Dubai Marina, Downtown Dubai, Palm Jumeirah, Dubai Hills Estate, Arabian Ranches), foreign nationals can own property outright on a freehold basis — permanent, heritable ownership with full title deeds issued by the Dubai Land Department.

In non-freehold areas, foreigners may hold musataha (right to build on land for a fixed period, up to 50 years, renewable) or usufruct (right of use, up to 99 years) leasehold interests.

Practical note: Virtually all developments marketed to international investors are in freehold zones. Always confirm the zone classification with the Dubai Land Department before exchange.

Title deed: The DLD issues a title deed (Oqood for off-plan; full DLD title deed on completion) which is the definitive record of ownership.

---

Thailand

Foreign ownership restrictions: Thailand prohibits foreigners from owning land freehold. This is a fundamental and longstanding restriction — not a bureaucratic technicality.

What foreigners can own freehold: Condominium units, within the 49% foreign ownership quota for the specific building. The remaining 51% must be Thai-owned. Before purchasing a condo, confirm the current foreign quota status of the development — if more than 49% is already foreign-owned, no further foreign freehold sales are permitted.

Leasehold: Foreigners can lease land (and structures on it) for up to 30 years under Thai law. Leases are commonly structured as 30+30 (with an option to renew for a further 30 years recorded in the original agreement). Note that the renewal option is not automatically enforceable at the landlord's death or sale of the underlying land — Thai law does not guarantee the renewal. This creates a material risk for long-term investors.

Thai company ownership: Some foreigners hold land through Thai-majority companies, technically meeting the ownership requirement. AMLO (Thailand's anti-money laundering authority) and the Land Department have increased scrutiny of nominee shareholder arrangements. This route carries significant legal risk and should not be pursued without specialist Thai legal advice.

See our guide to buying property in Thailand for the full process.

---

Spain

Structure: Spain is predominantly a freehold jurisdiction. Both land and buildings are held en plena propiedad (full ownership), registered in the Land Registry (Registro de la Propiedad). Foreigners have the same ownership rights as Spanish nationals and can hold freehold without restriction.

Timeshare and leasehold in tourist areas: A small number of holiday resort developments operate on timeshare (multi-ownership) or long-leasehold (50–99 year) models. Timeshare in particular should be avoided by investors — resale markets are negligible, maintenance fees escalate, and exit is extremely difficult.

Community of Owners: Spanish apartment ownership involves participation in a Comunidad de Propietarios (similar to a UK management company). This is not leasehold — you own your property freehold — but you share maintenance costs and decision-making for common areas.

---

Bali (Indonesia)

Indonesian land tenure — critical to understand:

Title	Who Can Hold	Description
Hak Milik (HM)	Indonesian citizens only	Freehold — strongest title
Hak Guna Bangunan (HGB)	Indonesian citizens and PT PMA companies	Building right — 30 years, extendable to 20 more
Hak Sewa	Anyone, including foreigners	Leasehold — typically 25–30 years
Hak Pakai	Foreigners (direct)	Right of use — 30 years initial, extendable by 20 and renewable for a further 30 (up to ~80 years total); residential, subject to minimum-value thresholds

For foreign individual buyers, the legally straightforward route is Hak Sewa (leasehold) on a fixed-term agreement, or Hak Pakai on one residential property meeting the minimum value threshold (which varies by province).

PT PMA (Foreign Investment Company): Many villa investors in Bali establish a PT PMA to hold HGB title. This grants a stronger, longer-term interest but involves:

• Company registration costs and ongoing compliance (accounting, annual reporting)
• Capital commitment requirements
• The HGB title covers the building, not the land — the land remains in Indonesian hands
• The PT PMA route is more commonly used for investment/commercial properties than residential lifestyle purchases

Key investor concern: Always check the remaining term on any leasehold Bali property, confirm renewal terms in the original agreement, and use an independent notary (notaris) who is not recommended by the seller.

---

Greece

Structure: Greece operates a predominantly freehold system. Foreign nationals (EU and non-EU) can purchase property in Greece with full freehold title, registered with the Hellenic Cadastre (land registry).

Border area restrictions: Properties within 20km of a land border or certain island areas are subject to approval by a local committee for non-EU buyers. This affects some northern regions and specific islands close to Turkey. For most popular tourist and investment areas (Athens, Mykonos, Santorini, Corfu, Crete), this restriction does not apply.

State coastal land: Some coastal properties, particularly older ones, have complex histories involving state-owned coastal strips (aigialos). Any coastal property should be subject to rigorous title searches to confirm the boundaries are clear of state land.

---

Egypt

Structure: Egypt allows foreign nationals to purchase property freehold, subject to certain restrictions. Foreigners may own up to two properties in Egypt and cannot own land greater than 4,000 square metres (approximately one feddan). Properties in border areas and certain strategic zones are restricted.

Coastal resort developments (Hurghada, Sharm el-Sheikh, North Coast) are generally in designated investment zones where foreign ownership is straightforward. Off-plan purchases require registration and often involve payments in installments over a construction period — ensuring the contract includes protections in the event of developer default is essential.

---

Cyprus

Structure: Cyprus is a full freehold jurisdiction with no restrictions on foreign ownership of residential property (one property; restrictions beyond that have largely been lifted). Title is registered with the Department of Lands and Surveys.

Historical title deed delays: Cyprus gained a poor reputation in the 2000s for significant delays between property completion and title deed issuance — sometimes running to 10 years or more. This was caused by developers mortgaging land before sale, creating encumbrances that prevented title transfer. Reforms (2015 and subsequent legislation) addressed the backlog and strengthened buyer protections. Any off-plan purchase in Cyprus should confirm that the land is unencumbered and the developer has clear title before exchange.

---

Investor Checklist for Any Leasehold Purchase

Before committing to any leasehold property, answer all of the following:

1. Remaining term: How many years are left on the lease?
2. Renewal options: Are renewal rights written into the original agreement, and are they legally enforceable against successors in title?
3. Ground rent / lease fee: What is payable to the freeholder/landowner, and does it increase?
4. Subletting restrictions: Can you let the property to short-term or long-term tenants without freeholder consent?
5. Mortgage financing: Will lenders accept the remaining term? (Most require 70–85 years remaining at the end of the mortgage term for residential lenders)
6. Resale market: Is there an established resale market for leasehold interests of this type in this location?
7. Exit at expiry: What are your rights at lease expiry? Is there any compensation for unexhausted improvements?
8. Freeholder identity and obligations: Who is the freeholder? Do they have outstanding maintenance obligations that could affect the property?

---

How Global Investments Can Help

Understanding tenure is one of the most important — and most often glossed over — aspects of international property investment. Our team ensures that every property we present to clients is clearly described in terms of the ownership structure, and that investors understand precisely what they are buying.

For leasehold and restricted-title markets (Thailand, Bali, Indonesia), we work with specialist local law firms who will review and advise on the title before any commitment is made. For freehold markets, we verify title at the Land Registry before recommending any property.

Speak to our team for a frank discussion about tenure in the market you are considering — it is one of the first questions we address.

This guide is for general information only. Land law varies significantly by country and changes regularly. Always instruct an independent local lawyer to advise on title before purchasing any property abroad.