Leasehold vs Freehold Property Ownership in Dubai: What Buyers Need To Know

Foreign buyers have played a huge part in shaping Dubai’s property market. Over the past two decades, the emirate has opened designated areas for full ownership and established clear rules for long leases, giving investors and residents a range of options rarely found elsewhere in the region. Choosing between freehold and leasehold though isn’t only about price or location, it defines how long you control the asset and what rights pass to future owners. Ownership type shapes how easily you can sell, pass on, or plan around a property later on. This article looks at what each option actually gives you in practice and where the differences start to matter.

Freehold ownership explained
Freehold gives you ownership of both the property and the land it stands on, but that right only applies in what are called Designated Areas. These are zones the government has approved for foreign ownership, chosen because they have the legal, planning, and service frameworks needed to support individual titles. Some of the most popular areas in the emirate like Palm Jumeirah, Dubai Marina, Downtown, and Business Bay fall into this category. The official list is set by the Dubai Land Department and updated as new districts are released. In practice, most modern residential projects marketed to expats fall within these boundaries, though a few fringe developments still operate under leasehold or mixed-use rules.

Step outside them and the deal may look different, you’ll often see long leases or usufruct rights instead. It helps to ask the agent or developer to confirm the tenure for that exact plot and building, since some projects mix types on the same site. Knowing where freehold applies helps you avoid surprises and understand exactly what kind of control you’re getting when you purchase.

Leasehold ownership explained
Leasehold works differently. You’re buying the right to occupy or sublease a property for a set number of years, usually between 30 and 99, while the land itself remains with the freeholder. In legal terms, it’s still ownership, but for a fixed period. Once that term ends, control of the property returns to the freeholder unless a renewal is agreed.
Most leasehold projects are run by developers or master owners who handle the wider upkeep and infrastructure. The leaseholder typically pays service fees, maintains the unit, and may need permission for major changes. The lease itself is registered with the DLD, and the rights can be sold or transferred if the original lease terms allow.
This kind of arrangement often suits investors who want lower entry costs or who prefer areas where freehold isn’t available, such as parts of Dubai Silicon Oasis, Deira, or the DIFC. The structure can also make sense for commercial buyers or those planning shorter holding periods. What matters is understanding the lease term, renewal clause, and any restrictions before signing, since those details shape both the property’s value and how easy it’ll be to resell later.

Key differences in rights and obligations
What really separates freehold from leasehold is how much control you have and for how long. A freehold title gives you indefinite ownership, while a leasehold interest runs for a set number of years. You can sell either one, though leasehold resales depend on how many years remain. A property with 80 years left may hold its value well, but once it drops toward 30 or 40, buyers and banks start to weigh that term more carefully.

Freehold titles usually change hands more smoothly because DLD transfers are straightforward and there’s no expiry to factor in. You can sell a leasehold too, but the buyer only takes over the remaining term, which often shapes both the price and negotiation. Renewing a lease is usually possible but never automatic, it depends on the freeholder’s agreement and what the market looks like at the time.

It’s also worth reading the service agreements carefully. In most developments, the master developer looks after shared facilities, while leaseholders handle maintenance inside their own units. Knowing who’s responsible for what avoids disputes later on.

From a planning view, freehold titles also make succession and inheritance simpler, since they can be willed or transferred directly. Leasehold interests can be inherited too, but the process often involves extra paperwork and approval from the freeholder, which adds time and cost.

Inheritance and ownership structuring
Inheritance tends to be something buyers think about later, but it’s better to understand how ownership affects it from the start. Freehold property can be included in a will registered with the DIFC or Abu Dhabi Judicial Department, which gives families a clear route for transfer and helps avoid delays. Once the will is approved, the DLD updates the title in the heir’s name, though that process depends on proper registration and paperwork being in order.

Leasehold property can also pass to heirs, but what’s inherited is the remaining lease term, and the new owner steps into the same contract. What many overlook is that some leases require the freeholder’s consent before any transfer, including inheritance. That detail often surfaces only when families try to register the change, adding time and paperwork that could have been planned for earlier.
Another consideration is ownership through a company, family office, or DIFC foundation, which allows separation of personal and investment assets. It lets families set clear rules for control, income, and succession while avoiding repeated probate on individual properties. It also simplifies cross-border ownership, since heirs inherit shares in the structure rather than the property itself.

How can The Knightsbridge Group help?
Knightsbridge Group advises international buyers and families on how property ownership fits within wider estate and asset planning. With over twenty years of experience, the firm helps clients structure purchases, hold property through companies or foundations, and record ownership in ways that stand up across jurisdictions. For clear, practical advice on property structuring, inheritance planning, or reviewing your existing arrangements in the UAE, contact info@kbgroup.ae.