Understanding the essential differences
The main difference between leasehold and freehold land lies in the property rights and conditions of use. Understanding these distinctions is crucial for real estate investors and individuals looking to acquire real estate.
Leasehold land
Leasehold land grants the buyer the right to use and occupy the land for a specified period, usually up to 99 years. The landowner remains the lessor (often the State). The key features include:
- Limited rights: the lessee has the right to build and use the land according to the terms of the lease agreement, but does not own the land itself. Upon expiration of the lease, the land and all constructions may revert to the lessor.
- Renewal: at the end of the lease period, it is often possible to renew the contract, but this depends on negotiations between the parties.
- Transferability: although the land is on lease, the buildings erected on it may have a market value and can be transferred to third parties, but the lease itself cannot be sold without the lessor's consent.
- Fees: fees may be payable to the lessor for the use of the land, and the lessee must also comply with the associated tax obligations.
Freehold land
Freehold land grants the owner complete rights over the land and the buildings on it. Here are the key characteristics:
- Unlimited rights: the owner has the right to use, sell, rent or modify the property without restrictions imposed by a lease. This includes the ability to pass the property on to their heirs.
- Legal security: freehold property is protected by the Mauritian legal system, offering greater security in terms of property rights.
- Appreciation potential: freehold owners can benefit from the appreciation of their property's value over time, which can lead to significant gains upon resale.
- Flexibility of use: owners can choose to occupy their property, rent it out long-term, or use it as a second residence, thus offering flexibility of use.
QUICK COMPARISON
|
Feature
|
Leasehold
|
Freehold
|
| Possession | Limited | Complete |
| Duration | Determined | Perpetual |
| Flexibility | Limited | High |
| Fees | Ground rent, maintenance charges | Fees Property taxes, maintenance costs |
| Security | Less secure | More secure |
| Value appreciation | Potentially limited | Greater potential |
Sell or Rent with DECORDIER real estate, your local agency in Grand Baie. Also, in France in Evian-les-Bains and Thonon-les-Bains.
DECORDIER immobilier Grand Baie
Phone : +230 268 2828
E-mail : contact@decordier-immobilier.mu
Website : www.decordier-immobilier.mu