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What is the difference between Leasehold and Freehold?

Leaseholders use their share in the property (typically measured in years) to determine when they must either renew their lease or buy-out the freeholder’s interest at what is essentially purchase price. Leaseholders are technically tenants, albeit with some liberties granted by contract, which include basic rights to occupy and use land without having to pay rent. This provision has historically enabled easy financing of fractions of farmhouses or tenement blocks that increase in value over time via depreciation allowances tax-free. Ironically, this “free” treatment can come at a cost when leases expire.



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