Freehold and leasehold in Dubai: where a foreigner can buy, and what the second one means

The first question on any Dubai address is not price. It is what form of ownership is on offer, because that decides what you can do with the property and what it will be worth when you sell.

Freehold

In designated areas a foreign national can own property outright and in perpetuity, with title registered in their name at the Land Department. Most of what an international buyer sees advertised — the Marina, Downtown, the Palm, the large master communities — sits in these zones. Ownership carries no nationality condition and passes by inheritance, though succession is an area where a will registered locally saves considerable difficulty.

Leasehold

Elsewhere, and in some schemes inside freehold areas, what is sold is a long lease — commonly up to 99 years — rather than the freehold. You hold the right to occupy and to deal with the property for the term; the land remains with the owner.

The practical differences are three. The term runs down, and a lease with thirty years left is a different asset from one with ninety. Alterations and subletting are governed by the lease rather than by ownership. And renewal at the end is a matter of what the lease says, not an entitlement.

Why it is cheaper, and when that is worth it

Leasehold prices below comparable freehold, and the discount is the point. It can be a sound purchase — the location may be unavailable freehold at all, and for an owner-occupier with a defined horizon the remaining term may comfortably exceed their own.

It is a poor purchase when the discount is treated as a bargain rather than as compensation for a wasting asset. The buyer you sell to will do the same arithmetic with fewer years left, and mortgage availability narrows as the term shortens — which narrows your buyer pool at exactly the moment you want it wide.

What to read before signing

• Years remaining, not the original term.
• Renewal provisions — whether there is a right, on what basis the price is set, and who decides.
• Ground rent and service charge, and how they escalate over the term.
• Consent requirements for alterations, subletting and assignment.
• What happens at expiry to the building and to any improvements you have paid for.

How to check which you are buying

The register is the answer, not the brochure. The Land Department record states the form of ownership and, for a lease, the term. Ask for it before the deposit rather than at the transfer, and confirm that the area is designated for foreign ownership at all — that single check disposes of most of the confusion around this subject.