There are so many definitions of a Freehold property that we are here to set the record straight. These kinds of properties are completely different to say something like a Leasehold property or a Commonhold (which is another term for a long-term leasehold) which we will explain later as well.
When a property is dubbed as ‘Freehold’ it essentially means that the person not only owns the building but also the land on which it is built.
A property that falls under a ‘leasehold’ is one in which only the building is owned by the person, and for a fixed amount of time. However, in this category of property, the land is not owned by the same person but belongs to someone else or the government body.
Why is it better to own a freehold?
Well, there are a number of reasons as to why we would definitely choose a freehold over a leasehold property any day. Some of these plus points are listed for you below:
- You do not need to pay rent, whether it is monthly or annually for example for the property or the ground itself.
- It belongs to you solely, so places like private residential developments such as BGVthat have swimming pools and private gyms, can be yours and bought outright and you do not have various laws and rules to abide by from agents or landlords (freeholders).
- It is your responsibility to maintain the building and do with it as you please, both inside and outside, as long as it does not disturb the overall structure.
- You have complete control over your bills i.e. your electricity, water, gas and so forth.
- In many cases, you may not need to pay Council Tax(this is dependant on the country and its laws). Singapore has a service charge in place of this.
- There are no worries about your rental period or lease time running out and having to look for another accommodation to move into.
What are some disadvantages to it?
- if you are looking for a flat, you won’t find one. This category mainly gives you the option of houses to buy (and the land they are on), as opposed to a flat or small apartment if you prefer.
- They are more expensive to own because you will be paying for both the land plus whatever is built on top of it, whether it is just a house or a house with 5 acres of garden property around it.
Things to keep in mind when buying a freehold
If you have been convinced that going this route is the best one for you, be sure to heed to a few things before you set out to do so. It is vital to make sure the property is completely freehold and not partially or commonhold or any other term that has been added to the categories over the past few decades.
Another thing, it is best to note that not all states or countries have the same rules around it, for instance in the UK, Scotland has a different system around this, in comparison to the rest of the UK i.e. they rarely have any leaseholds left, the place is filled with primarily only freehold property and any other was converted back in the early 20th century https://www2.gov.scot/Topics/Justice/law/17975/Abolition
If you are new to the property industry but are seriously thinking about taking on this option, as much as the world is your oyster, you will need to seriously consider a few things before you reach out to the first freehold you see. Especially in a place like Singapore, if you have just moved to the city or have been living there your whole life, you should look into the statistics regarding the property market and find the areas that have the best cost of living. Condos in this city can range from about $ 1,650,000 and up.
Look for a local property agent or someone who is familiar with the market and whose opinion you can trust to give you the best advice possible. There are also tons of different online forums and even property websites with listings that have all the details you need, to help you put all the important particulars together. Click on this page for more information.
At the end of the day it really is about what you can afford, but not just that, do not forget you will need extra for all the legalities such as stamp duty, registration fees, solicitors or brokers fees if necessary and if you are a non-citizen (or an ex-pat) you are charged additional fees. Also, keep in mind if you’re going through a real estate agent then they would also charge a certain percentage of between 1- 2% of the buying price.