
Owing to its futuristic skyline and thriving business landscape, UAE has been attracting investors from across the globe. It also has a bustling real estate market which has made it a hotspot for property investments. In the UAE, foreign nationals or non-UAE nationals can own property under two types of tenure – freehold and leasehold. Anyone looking to invest in the UAE must know the difference between these two property ownership structures.
What is Freehold Ownership & What are its Key Features?
As the name implies, in Freehold ownership, foreign nationals can own the property outright. This is only in designated areas of the UAE. The zones where foreign nationals can purchase property with full ownership rights include Dubai Marina, Palm Jumeirah, Downtown Dubai, Yas Island and Al Reem Island, Abu Dhabi. These areas were identified to foster economic growth of the country.
A few benefits of freehold ownership include complete ownership rights over the property and land, appreciation over time resulting in stronger rental yields and no lease period. Those who own residential or commercial real estate under the freehold structure are also eligible for the UAE Golden Visa.
What is Leasehold Ownership & What are its Key Features?
In Leasehold ownership, a non-UAE national can lease a commercial or residential property for a long-term period but does not own the land the property is on. The owner has limited ownership rights which generally spans to 99 years. The areas under leasehold ownership structure are found in regions where there is significant historical or cultural value. This is mainly because the government wants greater control over property ownership.
The benefits of Leasehold ownership are access to a larger range of areas and developments, lower initial cost as the buyer is not paying for the land, and the flexibility to make long-term rental contracts.