Freehold vs Leasehold: What You Need to Know

When purchasing property in Singapore, one of the most important decisions is understanding tenure - specifically the difference between freehold and leasehold properties.

What is Freehold Tenure?

Freehold means you own the property and the land it sits on indefinitely. There's no expiry date on your ownership.

Benefits of Freehold:

  • Perpetual ownership

  • Generally higher resale value

  • No lease decay concerns

  • Greater flexibility for en-bloc sales

    • What is Leasehold Tenure?

    Leasehold properties have a fixed ownership period, typically 99 years from the date the land was first leased from the government.

    Common Leasehold Tenures:

  • 99-year leasehold (most common)

  • 999-year leasehold (rare, treated like freehold)

  • 103-year leasehold (older developments)

    • Price Differences

    | Tenure | Typical Premium |
    |--------|----------------|
    | Freehold | 10-15% higher |
    | 99-year | Base price |
    | Remaining 60 years | 15-20% discount |

    Lease Decay: The Hidden Factor

    As leasehold properties age, their value can decline significantly:

  • 75+ years remaining: Minimal impact

  • 50-75 years: Some bank financing restrictions

  • Below 50 years: Significant value drop, limited financing

  • Below 30 years: Very difficult to sell or finance

    • When to Choose Freehold

    Consider freehold if:

  • You're buying for long-term investment

  • You want to pass property to future generations

  • You're concerned about lease decay

  • The price premium is reasonable

    • When Leasehold Makes Sense

    Choose leasehold if:

  • Budget is a primary concern

  • You plan to sell within 10-15 years

  • The location is prime

  • Lease has 70+ years remaining

    • Financing Considerations

    Banks may restrict loans for properties with:

  • Less than 60 years remaining lease

  • Loan tenure that exceeds remaining lease

  • Very short remaining lease periods

    • Conclusion

    Both freehold and leasehold properties can be good investments. The key is understanding your goals, timeline, and the specific property's characteristics.