Compare freehold and leasehold property

Which should you choose, 99 Years Or Freehold – The Complete Guide

Its normal in life that we are born, raised well through education until we become grown-ups.

Once you become a grown-up you inherit your parents’ wealth or investments. If your parents didn’t save or accumulated wealth, it’s upon you as an adult to work hard in life, save wealth and do an investment using your wealth.

Everyone would love to own an investment property, but we should know the various type of property you want town for you to make the right choice when you ultimately decide to invest in a property.

Before you set your mind to buy or invest in a property you should be aware that you should create a contract deal with your dealer.

It’s recommended to decide if you need freehold or leasehold property. Though leasehold property is 10 to 15 percent less price as compared to freehold property.

What’s the meaning of leasehold property?

Which should you choose, 99 Years Or Freehold - The Complete Guide 1

What’s leasehold? And how does it work?

  • It means that the property you own will one time expire according to the terms and agreements you made when you purchased it.

  • So for example, if you purchased land for a certain fixed period of time or any other period when your land expires you will have to return it.

  • If it belongs to the government, you will return it back to the state.

  • The lease period for a property is recommended to be 99 years or less and it can’t be more than that.

What’s the meaning of freehold property?

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It simply means that when you buy a property, you have permanent ownership of the same or ownership forever.

Example of freehold investment is an estate.

It doesn’t matter the size of the property you own as an investor you have the choice on what you can do with it next.

Freehold type is more valued when an investment is on land but when its other types of properties, freehold price may be more expensive than leasehold property in that case.

Now that you know the difference between the two terms, it seems freehold price is a bit more expensive as compared to leasehold prices.

Facts to note

You will also realize that most of the leasehold properties are located in good attractive places where people prefer.

They are also near facilities and amenities like markets, bus stations and MRT stations.

Freehold properties will have will have benefits that will last from your generation to the next generation specifically if it’s a land property.

Freehold and leasehold property in Singapore are both important and valuable assets to invest in.

For investment shouldn’t be all about profits and benefits but you will have peace of mind and feel at ease that at least you have something valuable. Which can serve you in case you have a problem to solve.

Please! Always try your best to check, read all the information and understand legal aspects related to property transaction so that when you finally decide to spend your money on a property.  So that you don’t regret spending your money.

A long time ago freehold property was favored and preferred for purchase as compared to leasehold property, but currently, it seems leasehold property is more favored.

But my question is, why would an investor choose on leasehold property?  While you are aware that in freehold property you get permanent ownership of your property. And what about leasehold property? You permit that title ownership for only a specific number of years and when it expires it’s returned back to the state.

Since leasehold properties are located in attractive places, they invest in places in some part of Singapore like City hall, High streets and North bridge road because they believe that investment nowadays is based on lifestyle.

Leasehold properties which are located in good places have got a high prospect of customers who prefer them for capital appreciation.

Here in Singapore people are well familiar with terms of purchase in leaseholds property. That’s why some of the investors here are very comfortable with leasehold deal.

On the other hand, there are investors who once they have interest and attracted to a property, they won’t care if its leasehold kind of a property or freehold.

But I think each individual should just decide on him/herself about the type of property he wants to invest in considering all the information you have on this. Though I still have to admit that leaseholds property has got high yields of customers or investors because of their fewer price schedules.

Leasehold property is more flexible in terms of market, thus making it persevere all the ups and downs of the economy hence becomes investors favorite.

For investors who want to invest in Singapore property, you should ask yourself many questions based on whether you need return benefits or rentals or gains from capital appreciation.

So if you consider yields so much, please go for leasehold property, but if you need capital value increase, you should choose freehold property which slowly increase after 10 years.

You should know that even as you choose freehold property, it cost more, it takes 10 to 15 percent more than leasehold property. For example, if you pay 2 million you will realize that you are running an extra amount of 200,000.

Another idea that freehold property is a permanent ownership of the property at times may be a wrong mindset because this property location belongs to the government.

The government will one day decide that they should build a proposed project, this means freehold property terms become null and void.

Remember for location benefits, leasehold property is the best because mostly they are found in attractive places, near markets, MRT stations and near amenities. This makes them of high demand and results in a high market value.

So when you want to purchase leasehold property, please consider location, its promising and brings a lot of income.

The belief that when the leasehold value of a property expires after 99years, leasehold value of a property appreciates as compared to freehold property.

I can say that it applies to both of them because when the market decreases, it will affect both of them at the same time.

Both the tenures are very important and we love them because they are properties but for benefits and professional perspective of view, leasehold is more recommended to freehold property.

It makes sense that leasehold will perform in terms of rental yields, but now the choice remains to be yours as the buyer to decide on which one to invest in after all this explanations and elaborations.

From all the information learned, between leasehold and freehold property, which one is better?

In Singapore there are only two types of property title ownership, that’s freehold and leasehold properties.

Leasehold terms are mainly preferred because of 99 years and 999 years leases, the land being leased belong to the state and subjected to terms and conditions.

  • In terms of capital premium, many people have been debating on this two tenures.

  • An answer depends on the price schedule and the perceived lifespan.

  • Though freehold prices schedules of the premium is a little bit over leasehold property and now it’s upon you to choose on the reasonable price.

  • According to Singapore revenue, freehold property charges a percentage of 4 to 10 over leasehold properties, leaseholds gives a duration of 99 years as you make yields and profits.

  • Now I suggest that paying for leasehold property is very profitable and reasonable.

  • Let’s take an example case of two projects running at the same time, Southaven 1 and southaven2 they are both located next to each other.

  • Sothaven1 is on a 99years leasehold site while Southaven 2 is on 999years leasehold site, let’s assume that 999years leasehold is freehold while that with 99years leasehold to be leasehold property.

  • In the year 1995, the gap percentage between southaven1 and 2 was 8 percent, this is earlier when the first data was read in comparison, the same year 35 units of Southaven 1 was sold at $600 while Southaven 2 sold for $680.

  • When it reached the year 2012 the gap between the two projects widened by 20 percent, this resulted to an increase by 27 percent of the price in Southaven1 at $800 and an increase of 40 percent at southaven2 to $960 during the same period.

  • The percentage kept on changing until it hit 34 percent in the year 2005 the gap remained at 20 percent between 1995 and 2012.

In Singapore it’s compulsory that lands are acquired by the government for the constructions of roads, express ways and MRT rails.

In that case the properties owners will have no choice but to sell their lands to the government, this will affect both the freehold and leasehold properties.

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From that narration, you now know the best tenure to invest your wealth in.

Compare and contrast between freehold property and leasehold property.

In this case, we ask ourselves several questions, we know very well that besides children investing in a house is a lifetime commitment.

But having had all the information available, to choose on which type of property to invest in is a bit confusing.

What most people think about is whether to go for freehold property or leasehold property.

Should we care on which tenure to choose on?

This makes us try to find out the main differences between leasehold property and freehold property and how it determines your property buying decision.

It may look like the two tenures are technical languages, but there are many important things about your property home or land than worrying about whether you will get it on leasehold or freehold terms.

There are different forms of home ownership, that’s lease and freehold ownership. But when buying a house you should differentiate between a house worth buying and the one not worth buying.

Failure to differentiate cause regrets in many people only after a purchase, and remember making a wrong choice may be a huge expense in your entire life.

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Let’s discuss first on the factors involved in freehold property.

If you own the freehold property, it means you are the owner of the building and the land it stands on.

Your name should be registered on the land as a freeholder of the land and as a person owning the land title.

  • It’s always the preferred option, you can’t go wrong with it.
  • No payment of annual rent,
  • You won’t fail to maintain your freehold and you won’t be charged excess amount.
  • You have a task of maintaining the building, roof and the surrounding of the whole building.

In this investment, a state puts land aside and dispose it immediately to an individual, the developer will build on the land and sell it to the buyer.

The buyer will build on it a property, as you continue owning the land as a developer, the buyer will be building different types of buildings and he will be given a title of master owner.

The buyer will still be owning the facilities but the developer still remain the owner of the land.

In order to change the title, you will have to follow many channels of which one of them is through strata title.


It’s only the government environmental conditions and planning which affects freehold property or investment.

 Because you may have purchased your land then suddenly a project from the state emerges, the state will take back your land, which is not the case with leasehold investment.

Though be sure that they will pay you back the market value of your property. Though you won’t have gained much, which is not the case with leasehold property investment.

  • Freehold investment has got a fair share of benefits, and there is no limitation on transfer of ownership, so it’s easy to transfer your land to someone else.
  • They may have the right to give the land but still, the final decision must come from the government planning control to facilitate the whole process for you.


Note that, that in some freehold properties, in order to transfer the ownership you have to consult or inform the state

They are very strict on this in case there is a property that was changed from leasehold to freehold property.

If you are a potential buyer, please check and investigate if there are restrictions on the land you want to purchase before you decide to buy.

What about leasehold property?

Getting a house from the freeholder who is also known as the landlord to use the house for a specified number of years.

The years are long-term as 90,120 and even the highest 0f 999years, at the same time it can be 40 years and less.

What are the leaseholder’s rules?

  • They pay maintenance fees
  • They will consult for any major work done to the property.
  • There is a restriction on what to keep in that home.

v    Leasehold property has restrictions which must come with the agreement of the lease.

v    It’s usually a deal of  99 and even sometimes it may go up to 999years.

v    These deals are found in some parts of Singapore like North East district in areas such as Seletar and Yio Chu Kang.

v    The tenant must take good care of the land or the property as its stated in the land legislation of law. Sometimes you may be required to make some changes or developments by a way of maintenance.

v    If the state declares tenant incompetent to take care of the land, then the tenure will risk being unsecured.


  1. Leasehold property takes a long time to sell– in order for a leasehold property to be sold, it takes like 3 or more months which only start after you have given out consent to the state for early approval.

  • And remember before approval is done, it can take a duration of about 6 months to 1 year.
  • This can cause delays in the process of your sales.
  • Because if you are in leasehold ownership, unlike how it operates in some of the freehold titles, the state or anybody relevant is the only one allowed to approve the transfer of leasehold title.
  • It will all depend on the number of consent requested on this, the delays happen in places like Changi, Loyang, and Pasir Ris.
  1. Leasehold property value may be lower than freehold property value.

  • In this value issue, the researchers have found out that leasehold properties with 99 years lease go up to a similar rate with freehold properties for a duration of 20 to 30 years.
  • Most leasehold properties do gain more values in the early years of the beginning, but if it goes past 30 years it becomes stagnant and reduces until the expiry date elapses.
  • In terms of price, leasehold property may or may not be cheaper than freehold property investment, reasons may depend on specific considerations.
  • If all the building details are equal for both the two tenures, like the surrounding conditions, area of which the property is built and the size of the land, the price of the leasehold may be 20% lower than freehold property.
  1. Financing leasehold property may be difficult to succeed in.

  • These developers face challenges with finance because the financial institution is strict on the duration your property has taken on the lease.
  • And in this case, they can only lend a property which is 75 and above years remaining on the lease.
  • These may discourage you and cut short your dreams of making your property develop.
  • There is a specific date expiry for leasehold property, you will be reminded or given a notice on the expiry date and you will renew it.
  • Leasehold business or investment is not that bad because whenever you are purchasing leasehold property you will realize that it comes with a lot of facilities from your developer and again may be priced lower than freehold property.
  • Since most developers understand the competition of properties in the market, they compensate with more facilities for leasehold properties.

After all these explanations, what kind of decision are you going to make?

  • Everyone may desire to own a property in Singapore. But you must be aware of the types of properties to make the best choice when you will finally decide to invest in the property.

  • Before ever settling down to decide on investing in Singapore, you should be aware of the deal you are engaging in.

  • Since the option of the property you choose will benefit you, because you shall have invested your finances, so you have to consider terms and conditions that best suit your transaction on whether its freehold or leasehold property.

  • The first wise decision to make when it comes to property ownership is that you have to know what you expect.

  • Take your time to research on locations that can be an ideal of a property, make a shortlist of things you think are very important.

  • All these will help you make informed decision along in prior as you visit the actual site for the interested property.

  • Finally it’s wise to reflect on whether you need a property of a fixed duration of 99years or freehold properties in Singapore. Irrespective of whether it’s a condominium or a land

  • Freehold cost 10% to 15% more than leasehold in Singapore. The premium charged can be more when a freehold property is near MRT station.

Money is frivolous and one day you may be affluent and on the other you may be surviving on the brink of poverty.

Such a circumstances take drastic measures to be taken.

For example, you may have to take the money out of the bank before the right time.

The following issue we will talk about, of course, doesn’t need to happen only in such an extreme situation, you may just want to change the bank.

No matter what the reason is, taking out the money you put into your fixers deposit account, unfortunately, does have repercussions.

Which should you choose, 99 Years Or Freehold - The Complete Guide 5

One of them is that you will lose the entire interest money you have gained.

It may also happen that you lose it just partially, and this totally depends on the bank’s policy.

If you were saving money in foreign currency, the situation is even gloomier as you may get back less than you put in.

What happens after my fixed term is up?

The response to the question is pretty simple – enjoy the money!

Nevertheless, there are some other options if you want to continue saving the money.

You can take the money gained by the interest rate of just rollover all the money you have in your fixed deposit account and continue earning.

It is important to communicate with your bank even before the maturity about what you want to do with the money because if you don’t, they will renew the fixed deposit for the equal period at the current market rate for a deposit of that amount and time period. 

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How do I get my deposit back after the time period is up?

There are a few simple options you have:

  1. pick the money up at the branch itself or the cheque of you wanted to have the money in that form
  2. ask them to send you the check via e-mail
  3. require transfer to your account
  4. require transfer to someone else’s account

Can I top-up the fixed deposit account?

Which should you choose, 99 Years Or Freehold - The Complete Guide 6

You initially may have invested the minimum amount of money but then had a change of heart and wanted to add a bit more?

Well, before you open the fixed deposit account you have to think through very well how much you want to put in because there is no possibility of topping it up.

However, what you can do is to open a new fixed deposit account with the additional amount of money you wanted to profit on!

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How does that bank calculate the interest return on a fixed deposit?

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Someone would think that this sort of ‘banking’ takes some sort of higher mathematics.

Therefore many people don’t even try to think about how much they will earn until they get the money because they put it aside just to have a peaceful mind when they are old.

Actually, predicting how much you will gain with the fixed deposit is not hard at all and all it takes is simple multiplying.

The deposited money should be multiplied by the interest rate and then by the amount of time your cash has been sitting in the bank – and that’s it!

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Pros and cons of a fixed deposit

Here, we will sum some of the advantages and setbacks when it comes to the fixed deposit.

You’ll be able to notice that avfixed deposit brings some risk wkth it which you have to take into consideration.

The biggest advantage of a fixed deposit is in its liquidity. With small amount of money invested you can double the gain by even just after a month.

This sort of saving your money bears no risks with itself and the return of money is secured.

In case that anything happens you can still have it insured by the Singapre Deposit Insurance Corporation.

On the other hand, the downfall is that you can’t withdraw money before maturity.

This means you can’t do anything with it during the tenure that you set with the bank.

Also, there is a risk of losing the interest when you take the money out earlier than planned.

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Why choose a fixed deposit?

The section before showed just some of the reasons to opt for a fixed deposit.

Besides being flexible and attainable in terms of money, it hides a few more aces under the sleeve.

Firstly, if the currency is foreign it will get you some extra dollars.

Finally, the interest money can be used a collateral when you are applying for an overdraft facility giving you the bedge with a good rate.

Fixed deposit VS savings account

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These two types of saving money are often the topic of many debates.

Customers ask themselves which one is better in terms of gaining money and security.

Here are some of our notes when it comes to the 2.

A fixed deposit has a score more because you can gain much more than with the savings account.

This is due to the interest rate that can be increased with the longer tenure periods.

Then, there is a difference how currency is used.

With the fixed deposit, foreign currency will work in your favour while you can’t even make a savings account with foreign currency investment.

However, we can say that savings account beats the fixed deposit in terms of liquidity because it is not bound by any fixed terms within which you are allowed to get the money.

Therefore, there is no risk of losing the money due to premature withdrawal.

Finally we have to note one last difference in the way the money is paid out – with the savings account it goes monthly while with the fixed deposit it is usually quarterly or annually.

This last variation is vital to notice when you want to set a certain pace to your savings, and it depends on when you are planning to use the money.

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