Acquiring a property with a leasehold arrangement signifies ownership of the building or unit, but not the land it occupies. The land is leased for a specific period, often decades or even centuries, from the freeholder (landowner). A common example is an apartment in a high-rise building where the individual unit owners hold leaseholds while the land beneath belongs to the building’s corporation or another entity.
Lower upfront costs often make leasehold ownership more accessible than freehold, particularly in prime locations. This affordability can be attractive to first-time buyers or those seeking property in expensive urban centers. Historically, leaseholds were prevalent in dense urban areas where land ownership was concentrated. This practice allowed for greater development and housing density. Leasehold structures also allow the freeholder to maintain certain controls over the aesthetics and management of the property, contributing to overall consistency and value.
