Leasehold
Leasehold is the right to hold a property for a fixed term, up to 99 years in Dubai, after which it returns to the freeholder unless the lease is renewed.
What Leasehold means for a buyer
A leasehold buyer owns the right to occupy and use a property for a set number of years, not the property itself. Dubai Law No. 7 of 2006 allows foreign nationals to hold leasehold rights of up to 99 years in designated areas, and such long leases are registered with the Dubai Land Department in much the same way as a sale. The registration fee is 4% of the value of the lease contract.
Most new off-plan homes sold to foreigners are freehold, so leasehold is the exception. You are most likely to meet it in a handful of older communities, in some projects on government-owned land, and in parts of the other emirates.
What to weigh:
- Remaining term. A lease is a wasting asset. Resale value and bank appetite fall as the term shortens, and some lenders will not lend on leasehold at all.
- What happens at expiry. Renewal is a matter for the lease and the freeholder, not an automatic right.
- Restrictions. Check whether you may sell, sublet or alter the property without the freeholder's consent.
Do not confuse leasehold with renting. An ordinary one-year tenancy registered in Ejari is a different thing, covered under long-term lease. Related rights you may see in Abu Dhabi are usufruct and musataha.
Related terms
Guides that use this term
Where Leasehold comes up in practice, with the costs, rules and steps around it.
Questions about the buying process?
An adviser can explain how this applies to the property you're considering.
- Current price list and availability, direct from the developer
- No fee to you on off-plan purchases: the developer pays us
- One salaried adviser, not on commission, from first call to handover
