Freehold purchase vs. leasehold purchase: What suits you as a buyer?
In Qatar, expats are allowed to hold a piece of property via a freehold purchase or a leasehold purchase. While both are great investments, each option has its own advantages for you as a foreign buyer.
Before you make a decision, here are a couple of things that you need to consider. To learn more about real estate in Qatar, including houses and properties for sale or lease, feel free to get in touch with us at The Pearl Gates Luxury Realty.
Defining freehold property and leasehold property
Freehold property and leasehold property differ in terms of ownership rights and length of ownership.
Freehold property is a piece of land that you own indefinitely. This includes owning the structure that’s built on the land. The Pearl-Qatar, which is a luxurious man-made island, is actually the first area in Qatar where foreign nationals can hold a freehold ownership.
Non-Qataris or expatriates in Qatar can purchase freehold property from 10 strategic areas or developments:
- Qatifiya West Bay
- The Pearl
- Al Khor Resort
- Al Qasar (administrative area)
- Al Dafna (administrative area)
- Onaiza (administrative area)
- Al Wasil
- JabalThaileb (investment area)
- Rawadat Al-Jahaniyah (investment area)
Leasehold properties, on the other hand, allow you to own buildings or structures but not the land on which they stand. With leasehold property, your ownership lasts until your lease expires or until it gets renewed.
For those who wish to buy property in areas other than the ones mentioned above, you are allowed to lease a piece of property for a maximum of 99 years. You also have the option to renew your lease after the period ends.
The areas in Qatar that are available for leasehold purchases are:
- Fareij Abdul Aziz
- Al Hathey Al Ateeq
- Doha Al Jadida
- Old Ghanem
- Fareej Bin Mahmoud 22
- Fareej Bin Mahmoud 23
- Al Khail
- Fareej Bin Dirham
- Al Sadd
- New Al Merqab
- Um Guilinah
- Al Khalifat
- Fareej El Nasr
- Airport area
When to buy freehold property
Buying freehold property is the preferred choice if you want to use the property as a long-term residence. You and your family can continue living in the home even after the owner has passed.
Freehold properties also give you complete control over your property. You can alter, install, or renovate any area of your home as you wish. Although freehold property is more expensive than buying leasehold property, you do not need to pay for ground rent, or any other fees associated with renting or leasing.
You can also be granted residency if you purchase freehold property in certain Qatar areas like the Pearl, West Bay Lagoon, and Lusail. This residency can be extended to your family as well.
The freehold property option works for those who are willing to shoulder the maintenance and repair costs for the home, which typically include the roof, garden, driveway, interior, and exterior of the property.
When to buy leasehold property
Leasehold property gives you the opportunity to use it for commercial purposes, as a rental, or as a private residence. And because they are generally less expensive than a freehold property, they are the better choice for those who plan to rent out their property. Leasehold properties also have the potential to generate higher profits if it has a desirable location and amenities.
Since the leasehold properties in Qatar arte bound by a 99-year contract, you will have an easier time obtaining a home loan. You are also not required to shoulder the maintenance costs of leasehold properties.
Things to remember when buying a property in Qatar
- Determine if the property is available for foreign ownership. Check with the Doha Municipality or the real estate registration department of the Ministry of Justice. If the municipality or registration department has approved of the purchase, you can now make your way to Al Sadd, which is where the registration office for non-nationals is located.
- Initial deposits are only made after the sales contract is signed. You must also wait for the property to be available to you before paying it in full.
- Pay the requisite fees. Qatar has a property transfer fee of 0.25% of the property value. Other legal fees include the authentication fee for documents, which is around QAR 15. Your developer may also choose to charge you separately for parking, maintenance, or parking lot fees.
- After purchasing a property, bring the signed contracts, property title deeds, and application forms to the Real Estate Registration and Authentication Department at the Ministry of Municipality and Urban Planning. For leasehold purchases, you must also visit the Office for Registration of Real Estate.