Leasehold vs Freehold: The Complete Guide for Foreign Property Buyers

Published on: June 26, 2026

The single most expensive misunderstanding in cross-border real estate is assuming that "buying a property" always means owning the ground it stands on. It often does not. In a long list of countries, a foreign buyer can hold the building, or a fixed-term right to the land, but never the freehold title itself. Thailand, Hong Kong, Israel, Ghana, the Maldives, the Philippines, Indonesia and Vietnam all work this way, each through a slightly different legal mechanism.

Before you wire a deposit anywhere, you need to know which kind of ownership is actually on offer, what happens when a lease runs out, and how that affects financing, resale and inheritance. This guide is the decision framework that sits underneath every individual country guide.

What freehold and leasehold actually mean

Freehold is outright, indefinite ownership of both the land and anything built on it. There is no expiry date. You can sell it, mortgage it, leave it to your children and exclude everyone else. It is the form of ownership most buyers in the US, Canada, much of Europe, Turkey and Australia take for granted.

Leasehold is a registered right to use a property for a fixed period, commonly 30, 50, 90 or 99 years. You hold genuine, legally protected rights for the term, but the land reverts to the freeholder (often the state) when the lease ends, unless it is renewed. As the remaining term shortens, the value typically falls, and many lenders will not finance a lease with only a short period left to run.

There is a third category worth naming. Strata or condominium title lets a foreigner own an individual apartment outright while the land underneath is owned collectively by the building's owners. This is the workaround many Asian markets use to give foreigners a form of freehold without handing over land.

Why the distinction matters far more abroad

At home, leasehold is usually a footnote. Abroad it decides whether your purchase is an asset or a depreciating right. Three things change with leasehold:

• Resale. A lease with a long term left sells readily. Below roughly twenty years, buyers and banks get nervous and prices drop.
• Financing. Mortgage availability is tied to the remaining term. Short leases are hard or impossible to finance.
• Inheritance and renewal. Whether a lease can be passed on, and on what terms it renews, is often buried in the contract rather than guaranteed by law.

Countries where foreigners can never own freehold land

These are the markets where the freehold answer is a flat no, and the reason behind each is different.

Thailand

The Thai Land Code reserves land ownership for Thai nationals. No visa, investment amount or treaty changes this for an individual residential buyer. Foreigners have three real routes: own a condominium unit freehold as long as foreign ownership stays within 49% of the building, take a registered 30-year lease on a villa or house (50 years in commercial or Eastern Economic Corridor cases), or use a Thai-majority company structure, which now carries serious legal risk after the Supreme Court ruled nominee shareholdings legally defective in 2025.

Watch one specific trap: the widely marketed "30 plus 30 plus 30, so really 90 years" lease. Thailand's Supreme Court has repeatedly confirmed that lease renewals are not automatic and not enforceable. Only the first 30 years are protected. A newer instrument, the sap-ing-sith superficies right (available since 2019), is registered against the title and is generally considered the closest thing to ownership a foreigner can hold on Thai land. See our full Thailand property guide for the buyer's checklist.

Hong Kong

Almost all land in Hong Kong is held on government leases. With one famous exception (the site of St John's Cathedral), freehold does not exist. Historically many leases ran to 2047, and the government has been extending them. You are buying a long leasehold interest, not the land itself, which is normal for the entire market.

Israel

Roughly 93% of land in Israel is owned by the State, the Jewish National Fund and the Development Authority, and administered by the Israel Land Authority (ILA). Most "ownership" is in fact a long-term lease, traditionally 49 or 98 years and routinely renewed. Reforms have allowed some urban residential and commercial leaseholds to be converted to full ownership, but the default starting point is leasehold from the state.

Ghana

Article 266 of Ghana's 1992 Constitution explicitly prohibits foreigners from holding freehold title and caps any lease to a foreigner at 50 years. Any document purporting to grant more is automatically reduced to 50 years. Around 80% of land is also customary land controlled by stools, skins, families and clans, which adds a second layer of due diligence on top of the leasehold rule.

The Maldives, the Philippines, Indonesia and Vietnam

• Maldives: foreign ownership of land is heavily restricted, and tourism and resort investment is structured through long government leases.
• Philippines: foreigners cannot own land at all, but may own a condominium unit, with foreign ownership in the building capped at 40%.
• Indonesia: freehold (Hak Milik) is reserved for citizens. Foreigners use Hak Pakai, a right-to-use title valid for long, renewable periods.
• Vietnam: foreigners can own apartments and houses on a time-limited basis (commonly 50 years) alongside leasehold land rights.

Countries where foreigners can own freehold

It is not all restriction. Foreigners can take freehold title in Japan, Malaysia (subject to minimum-price floors that vary by state), Turkey (subject to reciprocity rules), the United Arab Emirates' designated freehold zones, and across most of Europe and the Americas. In these markets the question shifts from "can I own the land" to ordinary due diligence on title and registry quality, which we cover in our guide to the safest countries to buy property abroad.

One caveat: even freehold-friendly countries contain leasehold. In England and Wales, flats are typically sold leasehold (a system currently under reform), and condominiums everywhere come with shared-land arrangements. Always check what you are actually buying rather than assuming the country's headline rule applies to your specific unit.

Freehold vs leasehold by country, at a glance

How to protect yourself on a leasehold purchase

If freehold is off the table, leasehold can still be a sound purchase, provided you treat it like the fixed-term instrument it is:

• Register the lease with the relevant land office. An unregistered lease offers far weaker protection.
• Read the term and the renewal clause carefully. Get renewal, transfer and inheritance rights in writing, and do not rely on verbal "it always renews" assurances.
• Find out who holds the head title and whether they have clean ownership and the authority to lease.
• Avoid nominee structures. Using a local national as a fake majority shareholder to hold land for you is illegal in places like Thailand and can lead to confiscation.
• Use an independent local lawyer (not the seller's or the agent's) to verify the title type and check for encumbrances. In Thailand, for example, the gold-standard land title is the Chanote.

Frequently asked questions

Is leasehold a bad investment?
Not inherently. A long lease in a stable market can perform well. The risk is a short or shortening term, an uncertain renewal, and the resale and financing limits that come with both. Judge each lease on its remaining term and renewal terms, not on the word "leasehold."

Can a lease be sold or inherited?
Often yes, but only if the contract allows it and it is properly registered. Transferability and inheritance are contract terms in many countries, not automatic rights, so confirm them before buying.

What happens when a lease expires?
The property reverts to the freeholder unless the lease is renewed. This is why the remaining term and the renewal mechanism are the two numbers that matter most.

Can I get a mortgage on a leasehold property?
Sometimes, but availability depends heavily on the remaining term. Many lenders require a minimum number of years left on the lease, and very short leases are hard to finance.

Related guides: The safest countries to buy property abroad, From residency to passport: citizenship timelines by country, and Do you have to declare your foreign property at home?

Disclaimer. This article is general information, not legal advice. Property and ownership laws change and vary by region. Always confirm the current rules with a qualified local lawyer before committing to a purchase. Information was believed accurate at the time of writing in 2026.

A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.