Monday, August 23, 2010

Freehold vs Leasehold Property in Dubai 2010

Freehold vs Leasehold Property in Dubai

The Dubai property market is experiencing a yo-yo effect these days, but it hasn't stopped the investors coming in or the developers from completing their projects. Among the most in-demand Dubai real estate types, freehold property takes the highest place. What is freehold and how is it different to regular leasehold property? In simple terms, it means expatriates can own property in Dubai, although they are not citizens. While the general public would be happy with that brief explanation, investors need to know much more about the difference between freehold and leasehold property and how the options affect their investment decisions in Dubai.

Typically, when you are a freehold property owner, you own all the rights to the property as a whole, which includes the building and the land on which it's situated. But in Dubai, freehold property is restricted to owning just the building and not the land. This is because law stipulates that no foreigner can own land in the United Arab Emirates. Dubai has limited freehold property developments to specific communities, which are liberally available for investors and end-buyers. Within main city areas, the majority of the property is still leasehold and only owned by UAE nationals. Even without complete autonomy, freehold Dubai property is always more appealing for buyers and investors, because it allows them to do as they please with their property, as long as it's within legislation and planning laws imposed by the Dubai government.

With leasehold, you only have the right of abode for a specified time period, such as one year, two years or more. Sometimes, the lease period can be for several decades. In general, leasehold property cannot be modified at will by the tenant. But in a more beneficial way, a leasehold property owner can rely on the property's original owners to supply maintenance and security services, while freehold property owners don't have that facility. In Dubai, this differs a little with modern freehold property, because the developers contract building maintenance and 24-hour security services before they sell the property to investors and end buyers.

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