Freehold vs Leasehold Property in Singapore (Common Myths)

Freehold vs Leasehold Property in Singapore (Common Myths)

If you are looking for private property in Singapore, you might be wondering whether to choose a freehold or a leasehold property.

Both types of properties have their pros and cons, and there is no definitive answer to which one is better. It depends on your budget, preferences, goals, and expectations.

In this blog post, we will explain the differences between freehold and leasehold properties, debunk some common myths, and share some tips on how to make the best decision for yourself.

What are Freehold and Leasehold Properties?

Freehold properties are properties that can be held indefinitely by the owner. The owner has full ownership of both the land and the building and can pass it on to their heirs or sell it to anyone they want. Freehold properties are usually more expensive than leasehold properties, as they are considered more scarce and valuable.

Leasehold properties are properties that are leased from the state for a fixed period of time, usually 99 years or 999 years. The owner has the right to use the land and the building for the duration of the lease but does not own them. When the lease expires, the property will revert back to the state, unless it is renewed or redeveloped. Leasehold properties are usually cheaper than freehold properties, as they have a limited lifespan and may face depreciation over time.

Get your personalised property strategy here

Common Myths about Freehold Properties

Many people assume that freehold properties are always better than leasehold properties, but this is not necessarily true. Here are some common myths about freehold properties that you should be aware of:

Myth #1: Freehold properties are better because the government cannot take back the property.

This is false. The government can still acquire freehold properties for public purposes, such as building roads, MRT lines, or other infrastructure projects. The government will compensate the owners at the prevailing market value, but they may not have a choice in giving up their property. For example, in 2016 and 2017, several freehold landed properties and apartment blocks had to make way for the new Thomson-East Coast Line.

Myth #2: Freehold properties are better because they are not subject to en-bloc sales.

This is also false. En-bloc sales are collective sales of an entire development by the owners to a developer who wants to redevelop the site. En-bloc sales can happen to both freehold and leasehold properties, as long as there is enough consent from the owners (at least 80% for developments older than 10 years).

En-bloc sales can be beneficial for owners who want to cash out on their property, especially if it is old or poorly maintained. However, en-bloc sales can also be disruptive for owners who want to stay on their property or have a sentimental attachment to it.

Myth #3: Freehold properties are better because they have higher value and rental yield.

This is not always true. While freehold properties may have a higher value than leasehold properties of similar age, size, and location, this does not mean that they will always appreciate faster or fetch higher rents. The value and rental yield of a property depends on many factors, such as demand and supply, location, amenities, condition, design, layout, and maintenance. Some leasehold properties may perform better than freehold properties in terms of capital appreciation or rental income, depending on these factors.

How to Choose Between Freehold and Leasehold Properties?

There is no one-size-fits-all answer to whether you should buy a freehold or a leasehold property. It depends on your personal situation and preferences. Here are some questions that you should ask yourself before making a decision:

What is your budget?

Freehold properties are generally more expensive than leasehold properties of similar quality and location. You may need to pay a higher downpayment, monthly installment, and stamp duty for a freehold property.

You may also need to consider other costs, such as maintenance fees, property taxes, and insurance. If you have a tight budget, you may want to opt for a leasehold property that is more affordable and within your means.

Related: What is Mortgage Refinancing

What is your purpose?

Are you buying the property for your own stay or for investment? If you are buying the property for your own stay, you may want to consider how long you plan to live in it, how comfortable you are with the possibility of losing your property when the lease expires or being affected by an en-bloc sale, and how important it is for you to pass on your property to your heirs.

If you are buying the property for investment, you may want to consider how easy it is to sell or rent out your property, how much return you can expect from your property, and how much risk you are willing to take with your property.

What are your expectations?

Are you looking for a property that is more stable or more flexible? Freehold properties are more stable, as they offer you more security and certainty in your ownership. You do not have to worry about the lease running out or the property losing value over time.

However, freehold properties are also less flexible, as they are more expensive and harder to sell or buy. Leasehold properties are more flexible, as they offer you more options and opportunities in your ownership. You can buy or sell your property more easily, or benefit from an en-bloc sale or a lease renewal.

However, leasehold properties are also less stable, as they are subject to the lease expiry and the property depreciation over time.


Freehold and leasehold properties have their own advantages and disadvantages, and there is no clear winner between them.

The best choice for you depends on your budget, purpose, and expectations. You should do your research, compare different properties, and consult a professional agent before making a decision.

Ultimately, the most important thing is to find a property that suits your needs and goals, and that you are happy with.


No comments yet. Why don’t you start the discussion?

Leave a Reply

Your email address will not be published. Required fields are marked *