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Freehold Vs. Leasehold


Q. What is freehold vs. leasehold? I've heard that foreigners cannot buy a freehold interest in Dubai. Is this true, and if so, then how is this property to be sold?

A. If you buy a freehold interest in a property (also known as owning it "fee simple,") you own the land, any buildings on it and the right to live there indefinitely. You can make any changes to the property, within the bounds of the law and planning restrictions. Houses are commonly sold this way.

With a leasehold property you buy the right to live there for a set period of time, paying ground rent to the land owner. At the end of the lease, ownership of the property reverts to the land owner.

At present there is no federal law to govern foreign freehold ownership of property in Dubai, so you are right in thinking that foreigners cannot buy a freehold interest. Therefore, in the properties we represent, condo hotel units are sold as 99 year leaseholds with automatic renewals for the cost of 100 dirhans, which is roughly $27 U.S.

However, in a few months developers hope and expect that the law of freehold ownership will change, and the properties that are currently leaseholds will be transferred to freehold status at that time.

The above question was submitted via e-mail by a visitor to The answer was prepared by Joel Greene, a licensed real estate broker, who specializes in condo hotels and the Dubai real estate market.

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