If you are doing property sales freehold enable you to transact easily. While for leasehold you need to get state govt approval which will take 6 months or more to transact. The con with leasehold is the property depreciates when the lease periods are to end. There are talks about extending the lease. But eventually it depends on the mercy of current state govt & the municiple council in charge. For freehold one need not be bothered about this. But with the current everchanging govt/politics the future for freehold is unpredictable. We read about ammendments to the constitution which allow freehold property to be set for development purposes. The owner are not given immunity over the matter.

For own stay leasehold is good enough. Let say at 25 years old you buy a new house. You just live up to 85 for example b4 the lease period ends. Even nowadays grown up children prefer to stay outside independantly persuing their career goals than depending on parents. Hence they are eagerly waiting to sell the house when you depart. No matter if lease or freehold. In short you are giving them a silver/golden spoon.

During our grandparents time, they insist on freehold as they want all their childrens to grow up & start a family empire under one roof. The setback is there are bound to be family politics going around which causes unease among all. If you watched chinese movies you know what I mean. Like in Malay "banyak udang banyak garam. banyak orang banyak ragam".

With the availability of choices in different location. Most people prefer areas which are convenient to them in order to work, play & raising childrens. Hence they surely need a house for shelter or apartment for example to serve their basic needs.

Anyone with ideas on the relevancies between both as of now & future kindly comment.

Mr WLToh has given his views on the applicable or rather the advantage owning leasehold and/or freehold properties.Perhaps,gone are the days whereby freehold property is considered precious and secured to own as compared to leasehold.In Selangor alone there is not many of freehold lands left almost every piece of available land is own by State Government under leasehold status.Even that developers have not much choice but to develop the leasehold land and the price of double storey link house come to almost half million ringgit.So who cares of the status,eventually the houses are sold out,like it or not we have no alternative but to buy.
Again by God grace, if we live to the ripe old age of 80 out of leasing period of 99 years,we are lucky, only thing is to remind and request our children or grandchildren to apply and to renew the lease for another 99 years.After that the story will be repeated for as long as he or she owns the house.
For Malays the house is a lifetime property and before you leave this world you have to think of a way how to distribute your property according to Muslim law and its quite complicated.To this viewpoint,we usually sell off the house and distribute the amount accordingly.I think it is the same for Chinese.Before the sibblings relationship turn sour because of property,this is the only way to do is to sell it and distribute whatever money obtained otherwise your soul will not rest in peace.

To make things easier, take for example Wangsa Maju. We all knew Desa Setapak 2.5 storey 14'x 55' houses are freehold. However the setback is the houses are located at lower ground slope. In morning there are wet market around and the area stinks. Then again there are so many shoplots around & the area is somehow like cowboy town.

Since the houses are sandwiched together, people are complaining staying inside is very cramp & congested. The neighbourhood gave a nick name "pigeon hole". Not forgetting when neighbour open their radios not so loud. You are still able to face the music. If any argument going on. The whole neighbour knows what's going on. To add more problems, there are Putra monorails passing by the houses. Time after time you will hear firecrackers which is somehow really darn irritating. At night you hear noises as people are dining nearby the shoplots. Not forgetting occasional shouting if there are FIFA, Euro league & movies going on.

If you want better living with similar budget at Sek 2, you can consider the 5 storeys apartment. Which will have 3 rooms and 2 bathroom on conner lot >800sf of similar budget. The mid lot only has 2 rooms & 1 bathroom for lower budget. The location is slightly better on upper ground with lots of parking around no matter how many cars you have. Park anywhere you want. Other than that the maintainance fee is less than RM50 per mth. You can forget about condo maint fee & sinking fund.

You'll also be able to enjoy cool air & birdview on the scenery. In addition accessibility to public transportation is easy. Not forgetting going to Metroview WM shoplots & Desa Setapak is walking distances. Owners are able to rent out good price cheaper than Metroview WM & condo's around to TARCians. Time after time when new semesters starts you'll people walking around looking for rent. However the not so good news is the area is leasehold. But anyhow they are all sold out during launch since mid 80's. The same goes to houses at Desa Setapak.

So the question now is the relevencies between both land titles to affect one's buying decision. Location wise and infra both has their own pro & cons.

There are benefits of both leasehold and freehold. The obvious benefit with leasehold is that you get much more for your money.

Most people have a certain budget. If you can get a bigger condo or land for the same budget that means you live in a better and bigger place, which is the most important factor of all. If you plan on staying long term the extra time to transact is not big deal. And the cost of the extension of the lease is not much either. And the government is VERY unlikely to not renew the lease as it would be a very unpopular move (and why would they want to make an entire area empty when people are happily living there?).

To what I knew checking with real estate agents, freehold cost 15% - 20% more in comparision with leasehold of same unit size. If you are financing your home for 20 years the additional amount plus interest would cost lots more money.

Well to my latest survey with the Developer of the undergoing housing project at the inerior of Damansara Damai,a double storey link house on leasehold is going for RM550,000 !more than half a million rgt.Comparatively even a second hand double storey house on freehold land does not come to that kind of pricing !

toh, interesting you think leasehold is 15-20% cheaper. just thinking about it, i think it's 20%.

Here is also another interesting article on the subject:

Pajakan vs Pegangan Bebas (Leasehold vs Freehold) .
Assalamualaikum dan Salam Sejahtera.

“En. Isa, rumah nie Freehold ke Leasehold?”

Saya seringkali ditanyakan tentang persoalan diatas ketika berurusan dengan prospek yang ingin membeli hartanah, tak kira tanah lot banglo, rumah teres, bangunan komersial mahupun apartment dan kondominium. Apakah penting sebelum membuat pembelian untuk mengetahui status hartanah tersebut? Apakah perbezaan dan kesannya terhadap pembeli? Saya akan mengupas persoalan-persoalan tersebut satu persatu melalui pengalaman saya sebagai perunding hartanah.

Amat jarang sekali prospek saya yang tidak bertanyakan persoalan diatas. Kalau adapun, prospek saya yang datang dari luar negara yang tidak pernah pun tahu tentang hal ini. Bagi saya, persoalan ini amat penting kepada pembeli hartanah. Terdapat dua kategori besar pembeli hartanah. Kategori yang pertama ialah mereka yang membeli hartanah untuk kegunaan sendiri dan kategori yang kedua ialah pelabur hartanah.

Walaupun kedua-dua kategori yang saya sebutkan diatas akan lebih cenderung memilih hartanah berstatus Pegangan Bebas (Freehold), adakah ini bermakna hartanah Pajakan (Leasehold) tidak mendapat sambutan? Ketika saya mula-mula bekerja dengan pemaju perumahan, saya telah ditugaskan untuk memasarkan dua projek perumahan yang mempunyai status Pegangan Bebas dan Pajakan.

Projek Perumahan (A) yang berstatus Pegangan Bebas terletak diatas bukit yang nyaman dengan persekitaran yang tenang, terletak hanya 1.5 km dari Bandar Rawang, mempunyai senibina yang menarik dan dan lebih luas. Manakala, Projek Perumahan (B ) yang berstatus Pajakan pula terletak bersebelahan dengan bukit batu kapur dan lebuhraya yang sibuk, keluasan yang agak kecil dan senibina yang tidaklah begitu menarik. Terletak kira-kira 12 km dari pusat Bandar Kuala Lumpur dan harganya lebih mahal berbanding Projek Perumahan (A).

Setelah setahun setengah dilancarkan, Projek Perumahan (B ) telahpun 99% habis terjual dan fasa kedua dilancarkan. Kali ini fasa kedua hanya mengambil tempoh yang singkat untuk dipasarkan. Berbanding Projek Perumahan (A), walaupun hanya sedikit unit rumah ditawarkan, ianya mengambil tempoh yang agak lama untuk terjual. Jelas sekali disini, faktor status hartanah adalah bersifat sementara untuk pembeli kategori pertama. Lokasi hartanah akan mewajarkan keputusan untuk memutuskan pembelian hartanah yang diidamkan. Jika anda bekerja di Lembah Kelang, adakah berbaloi anda membeli rumah idaman berstatus Pegangan Bebas di Bandar Rawang?

Bagi pembeli kategori kedua iaitu pelabur hartanah, status Pajakan adalah sesuatu yang jika boleh sangat mahu dielakkan. Ini kerana proses pindah milik setelah mereka menjual hartanah tersebut akan mengambil masa yang agak lama dan ini akan merugikan mereka. Walaubagaimanapun, jika hartanah yang ditawarkan terletak dilokasi yang sangat strategik dan mempunyai bekalan yang terhad, pelabur akan mempertimbangkan untuk membelinya kerana peningkatan nilai hartanah tersebut kelak.

Kebanyakan hartanah yang dibangunkan di negeri Selangor dewasa ini mempunyai status Pajakan. Pajakan selama 99 tahun adalah melebihi satu generasi dan hartanah seperti ini masih boleh dipertimbangkan. Apa yang perlu anda teliti, jika anda mahu membeli hartanah, pastikan ianya tidak kurang dari pada 50 tahun. Kebanyakan institusi kewangan akan memberikan margin yang amat rendah untuk membiayai hartanah seperti ini. Walaupun sesetengah orang akan memberitahu anda bahawa pajakan ini boleh dipanjangkan dengan membayar premium ke pejabat tanah berkenaan, pembelian hartanah seperti ini seeloknya dielakkan. Premium akan dikenakan berdasarkan nilai pasaran untuk melanjutkan tempoh pajakan. Tetapi tiada jaminan tempoh lanjutan pajakan akan diberikan oleh Pejabat Tanah.

Sebagai kesimpulan, hartanah berstatus Pegangan Bebas adalah yang terbaik jika anda dapat memilikinya tetapi tidak semestinya anda tidak boleh menimbangkan untuk membeli hartanah berstatus Pajakan dengan mengambil kira 3 faktor berikut:-

1. Lokasi dan bekalan yang terhad tetapi mempunyai nilaian yang relativenya tidak terlalu tinggi dengan hartanah lain disekitarnya yang mempunyai ciri yang setara.

2. Jika hartanah baru mempunyai Pajakan 99 tahun dan tidak kurang 75 tahun, teruskan hasrat anda untuk memiliki hartanah tersebut kerana tidak akan banyak isu yang timbul.

3. Jika hartanah mempunyai Pajakan kurang 50 tahun, eloklah carilah alternative lain kerana hartanah seperti ini akan mengalami kesusutan nilai yang amat ketara walaupun anda mengambil kira faktor lokasi dan bekalan yang terhad.

I would greatly appreciate it if someone could give a very brief summary translation of that.

The above article is basically on a topic concerning comparison of marketability of properties Based on location differences and its unique pricing upon considering factors which include availability of property categories of accomodation like houses , according to the likings of property investors as opposed to private dwelling purposes.

It is a performance orientated market which changes according to time.

The author highlighted an experience which he has encountered with a project within a township which described a past experience that prompted him to write this article.

Before the author concluded with three simple deductions on his article, he rely mostly on his past experiences to draw the comparative differences of what he understood as freehold as opposed to leasehold holdings and the avaiiability of land premiums for futher extension of leasehold holdings prior to its expiry date and how suited are such markets operating within a limited time duration that is changing accordingly with the likings of each generation.

That I believe pretty sums up most of what is meant in that article.

I have this perception to rely heavily into FREEHOLD land status, in whatever properties I am interested in.

Leasehold always give headache

1) The need to wait for state consent on transfer
2) A longer time frame while waiting
3) lower MOF from banks
4) Lousy rates from the banks
5) Lower value for the Valuation
6) Premium for extension issues (if your property appreciates a lot in prime location, so do your premium, depending on the land authority)
7) The need to explain/convince to prospective buyers if you were to sell a leasehold property to him
8) The need to extend the lease to him, or he give it a pass
9) The need to wait for the RIGHT BUYER that accepts leasehold status
10) The anxiety caused by people condemning leasehold, and you have sleepless nights
11) There are so many FREEHOLD properties around, why buy leasehold?
12) etc...

Leasehold property, big NONO to me. Nowadays, leasehold properties are priced equivalent to freehold properties. Like Hassan said, on the Damansara Sutera project, double storey terrace (leasehold) already costs RM560,000 !! and that is not even Petaling Jaya address (Borrowing damansara name because it is under MBPJ). My as well I get a Freehold double storey at Bandar Puteri Puchong at the same price. Or my as well I buy SS2 sec properties at RM550,000 (freehold, toll-less, top-notch location).

Freehold properties in the long run, still prevails. If you think for own stay, leasehold not an issue is not exactly true, because your house will be handed over to your children anyway (if you don't sell). At that point, lease has dropped, and who will renew? YOUR CHILDREN.....

My 1 cent........

Talking about inheritance, for shops it's BEST RECOMMENDATION to have freehold. Cause when you are doing business. You are indeed inheriting them for your childrens to continue the legacy. This is your own security for the family than working for people. Cause employing companies does come & go and people are left jobless. That's indeed sad reality for sure. Besides that no one in his/her right mind allow their shops to be taken back by state govt when lease ends. That is when businesses are obviously good.

Household is one subjective question, many of our older generation insist on freehold. No freehold no buyers in the past. They wanted every one to stay under one roof. However due to current situation with regards to individual career profession does not permit their children to stay at same place. Many opt to move out seperately to different places. In fact you have no control over your childrens during their adulthood. In addition to that if you have 1 children you are giving him/her a golden spoon. For others they will be fighting all out for the property over your written will. Else for leasehold you leave them a choice to continue to pay for ext at least cheaper than buying new house. Else leave it to the state govt to take them away... simple as this. But the in reality they will have the unit sold.

For me I always prefer freehold. The issue now is how it does serve individual interest which is somehow mind boggling. Location to interest is one of top priority to commute to from work & leisure. Another thing also recent dev by state govt leave no choices for people to choose from freehold except lease.... You can choose from freehold at high end dev at exhorbitant price same place. Perhaps shift to somewhere further for freehold prop going with the flow....

Take for example Bander Puteri Puchong. In the past it was deserted area. Nobody wants to buy although houses are really cheap. When the LDP opens the surronding area became a boom for new town. Hence the market prices rises rapidly. If anyone were to had a house or land by now consider rich. But in case if development does not route through. That's a huge risk for house buyer & investors to gamble with.

For own stay, if I were to work at Cyberjaya with the cloveleaf interchange for direct access. I have a choice consider terrences at BBP2 20'x 75' & Nusaputra 20'x 100'. The freehold BBP2 house cost me RM700K+ while the leasehold at Nusa cost me less than RM600K. I may consider leasehold cause I will have more money to spend & more space for childrens. End of the day financial freedom is what that matters.

On otherhand I won't be able to live up to 100 years old to witness the lease end. So why should I be bothered at all. Even if I had kids of 30+ of the lease. I cannot see what they'll do with the house if I leave this world. But most importantly I done my part and make sufficient funds to fulfill my responsibilities. This is better to be financially bond to the bank for land title sake throughout my entire life. Hence restricting my cashflow to the bondage of debts.