What's the Difference Between Freehold and Leasehold?

What Is a Freehold Property?

A freehold property represents the most common property type in Ireland. When purchasing freehold, you own both the house and the underlying land, providing complete ownership. As the owner, you bear full responsibility for maintenance, insurance, repairs, and general upkeep of both the building and land.

What Is a Leasehold Property?

A leasehold purchase means you own only the building or flat, not the underlying land. Ownership is limited to a specified period, after which ownership reverts to the original freeholder. Unlike freehold purchases, leaseholders pay no stamp duty. Leaseholds are typical for flat purchases, with the freeholder maintaining the building. Leaseholders typically pay ground rent to the freeholder for building services.

The freeholder is still the owner! It is possible that the freeholder might write certain conditions into the lease that could put some restrictions on what you can do with your ownership of the property.

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How Long Does a Leasehold Last?

When purchasing a leasehold, understanding the lease duration is crucial as it determines both the price and how long you can occupy the property. Lease terms generally extend over hundreds of years, providing lifetime security of ownership.

What Types of Leases Can You Get?

Standard leasehold agreements include:

  1. 99-year lease
  2. 150-year lease

Can I Renew My Leasehold?

Leaseholders can renew their lease with freeholder agreement. Renewal should occur well before lease expiration to avoid complications. Upon renewal, an additional 90 years are added to the remaining time. For example, with 40 years remaining, renewal would extend the lease to 130 years total. Freeholders may charge fees for lease renewal.

Are Leaseholds Cheaper?

Leasehold properties typically cost less than freeholds since you are purchasing only the building, not the land. However, mortgage terms may be more expensive for leaseholds than freeholds, depending on the lease length.

Mortgage lenders typically impose stricter conditions on leaseholds:

  • Will not lend on leases under 70 years remaining
  • Offer lower loan-to-value ratios
  • Usually cover only 80–85% of property value
Loan-to-value explained: If a house costs €250,000 with a €25,000 deposit (10%), the lender provides €225,000 (90%), making the loan-to-value 90%.

Can a Leaseholder Buy the Freehold?

After holding a leasehold for two years, with at least 21 years remaining on the lease, leaseholders can explore purchasing the freehold. This option remains uncommon for flat dwellers and involves complex negotiations with the freeholder.

Can I Buy Out the Ground Rent?

Leaseholders may purchase the ground rent outright under certain conditions. Two methods exist:

  1. Privately — Direct negotiation with the landlord. Residential owners pay a €30 fee; non-residential owners pay €65.
  2. Via Local Authority (Ground Rent Purchase Scheme) — The Property Registration Authority (PRA) manages the legal aspects. Residential owners pay a €105 fee; non-residential owners pay €195. You receive a Vesting Certificate requiring Land Registry registration.

Can I Buy a Share of a Freehold?

For flats and apartment buildings, freeholds may be sold as individual units rather than as part of a lease. This enables shared freehold ownership where you own your property portion outright without leasing.

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Freehold vs. Leasehold: Which Is Better?

Both property types offer advantages and disadvantages.

Pros and Cons of a Freehold Property

Advantages

  • Full ownership
  • No time limit
  • No community charges
  • Better mortgage rates

Disadvantages

  • More expensive
  • Responsible for maintenance
  • Need to handle insurance
  • Value could decrease due to damage

Pros and Cons of a Leasehold Property

Advantages

  • Usually cheaper
  • Freeholder responsible for maintenance
  • Freeholder handles insurance

Disadvantages

  • Restrictions on your ownership
  • Value of property might decrease
  • Community charges

Frequently Asked Questions About Freehold vs. Leasehold in Ireland

With a freehold, you own both the building and the land outright with no time limit. With a leasehold, you own only the building for a specified period, not the underlying land, and pay ground rent to the freeholder.
Yes, but mortgage lenders impose stricter conditions on leaseholds. Most lenders will not lend on leases with fewer than 70 years remaining and typically offer lower loan-to-value ratios of around 80–85%.
After holding a leasehold for two years, with at least 21 years remaining on the lease, you can explore purchasing the freehold. You can also buy out the ground rent privately or through the Ground Rent Purchase Scheme via the Property Registration Authority.
Standard lease terms are typically 99 or 150 years. Leaseholders can renew their lease with the freeholder's agreement, adding an additional 90 years to the remaining time.
It depends on your priorities. Freehold gives you full ownership with no time limit but is more expensive and comes with full maintenance responsibility. Leasehold is usually cheaper with the freeholder handling maintenance, but has ownership restrictions and community charges. Read our solicitor guide for help navigating your purchase.

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