Does it matter that much ? If so, what and how much does it matter ?

freehold is more valuable by 10-15% (estimation only)

u would have difficulty in securing loan or refinancing your leasehold property if the remaining lease less than 30 yrs.

whether freehold or leasehold, the government can always acquire ur land according to their needs, however, u get more compensation if its freehold (according to market price)

Lin Chiek Chong

I have never heard of the government taking back either leasehold or freehold land. Does it ever happen in practical terms.

What you're saying about freehold land is rather worrying. I assumed freehold means that it's yours and no-one has the right to take it.

And how does the compensation system work?

Thanks

some of my clients own freehold land at segambut area, the gahmen is acquiring their land to widen the road heading to taman sri sinar. the gahmen will compensate them according to market rate, however, i was told the offer is slightly less than market price.

it's difficult to sue the gahmen since the acquisition is for the benefits of majority road users there... but you can always hire licensed valuer to negotiate the offer price.

The difference between Leasehold and Freehold is that legally speaking the first is supposed to be temporary and the second is permanent.

Leasehold property is as the name indicates: on lease.
- It is legally and technically still owned or reserved to title-holders, indigenous population or the government.
- The leasehold agreement places limitations on what can be done with the property. For example: to knock down an old development and build a new one would require a new leasehold agreement. There are associated costs with each of those arrangements.
- Every time the leasehold property is bought and sold there are more procedures and headaches.
- Even though it rarely ever happens, there is still a possibility legally that a leasehold will NOT be renewed and therefore the land needs to be vacated and anything immovable on it knocked down.

Freehold property is the person's free and clear. He owns it and owns the right to anything in and on it. There is no re-arrangement if a bungalow is torn down and rebuilt and much less procedures with buying and selling.

So the result is of course that freehold is much more desirable and a more secure class of asset for ownership. Freehold land costs full amount of money to purchase and own and that grows with time, while leasehold are generally small concession fees, hence a base difference in freehold and leasehold value exists.

The difference in value increases the closer you come to a leasehold expiry and yes indeed, banks naturally will be reluctant to finance something in danger of being lost.

Alex, What Lin meant and was referring to is more generally known as "Land Seizure" by the government for public projects, which is practiced anywhere around the World actually. It is however not very relevant to the issue of leasehold and freehold, except in that again there is a difference in compensation, with leasehold there will be very little payment to represent maybe the remaining period in the agreement, while in freehold market value will be paid.

this is a wonderful topic....
how about resale of leasehold properties...by right, it shouldn't increase very much vs freehold....is that right?

Nowadays most of the houses are on leasehold land.The meaning of leasehold is one only buy the property i.e. the house and not the land.The land is owned by the State Government for the purpose of levying the tax for revenue( land assessment).The leasing period is usually for a duration of 99years and is renewable before the expiry period.Very seldom that we hear the state government re-take the land back.The disadvantage is that.the ownership has to remind his or her next generation as not to forget to renew the leasing agreement before the expiry period..Another setback is that if one wish to sell the house and not the land the buyer will check on the balance of leasing period left.Anything below 20 years will have your house depreciated drastically in value or perhaps the buyer will have second opinion in buying.Anyway for a leasehold property, much depend on the location,property with all the conveniences will contribute to the high sales value of the house which perhaps maybe at par in value to that of freehold property .On the other hand,one will experience no hassle with the status of freehold property and the owner will have peace of mind until to his last day in this world.

wow...u guys r brilliant. this discussion really helps me out...

its kinda hard nowadays to find a freehold property at a strategic location with a nice price tag on it (which is friendly to the wallet hehe). so i would say that im kinda having not that much of choices but to buy a leasehold ones. with an ease of mind, i can now start looking for my dreamhome...(although its a leasehold)

Very interesting!

One quick question though, Is there an area where all properties are on leasehold? or areas that are not or on freehold? Or it is all over the country depending on the (individual) owner/developer. Take for example in the Philippines, only in the Freeport and other government properties offers leasehold...any idea?

Noel,

It depends how the land are zoned by the authority. I do not know how they determine this but I think whether an area is lease or freehold is determined long ago. In the Klang Valley for example, we are running out of new freehold land. But this does not mean that lands in remote location are all freehold. The best source of accurate information is the grant and the land's office.

Need some advise from you all, if I want to buy a condo, leasehold or freehold should I go for it?

Freehold means its yours forever, you don't need the government's permission to sell, because your neighbours know it's theirs forever and they invested more they usually maintain it better, and because a lot of people won't buy leasehold the demand for freehold is always higher so it's easier to sell.

The main disadvantage is price.

In some cases leasehold can be fine. For example, Tropicana is leasehold but the owners maintain their properties well and it's fairly easy to sell.

But in most cases it's much better to buy freehold. The only time it can make sense is if you can't afford a freehold property and you are buying for your own stay so you will likely sell after tens of years.

Do we need consent from land office to sell leasehold ? If the answer is yes, how long does it take to get consent ?

No consent needed if it's leasehold.. Freehold means - The land and building belongs to the title holder.. whereas Leasehold - The building belongs to the leased title holder, but land belongs to the Government and is leased to you for 30, 60, 99 or 999 years.This lease is however renewable, subject to a premium.

As far I am concerned, one has to check the land title, be it master,strata or individual title. Certain lands regardless of Freehold or Leasehold will need consent from state authority before disposing the land, of which the building may or may not be erected on it.

In most instances for leasehold land, you will need a consent from the State Authority. Only with this consent that the authority may keep track on the lease status and to charge a premium when it is below 30 years. If you are selling your property with a land lease of only 50 years, you may opt to renew it and pay the premium. It is pretty devastating for the buyer if the banks are not willing to finance with land lease of only 50 years.

One important point is how are land premiums calculated.

For example, is development of housing development chargeable in the same way as other
residential with commercial establishments ?

What are the criterias used to determine the increase or the maintaining of land premiums
where development is slow ?

Are reputation of developers a criteria as well ?

These are some of the questions which need some direct answers.

Any takers ?

Taking Majlis Perbandaran Selayang calculation format as follow:

For lease renewal: 1/4 x 1/100 x Nilaian Tanah Semasa x (Tempoh Pajakan baru - baki tempoh pajakan ada)

Eg. if Land Value is RM1mil @ 50 years land lease remaining

The premium will be:

1/4 x 1/100 x 1,000,000 x (99 - 50)

=RM122,500 / RM2,500 for each year (premium for extension to 99 years)

Could be quite hefty heh??

The above calculation is for residential. No idea on commercial calculation.

Chin Kim Keong wrote:
As far I am concerned, one has to check the land title, be it master,strata or individual title. Certain lands regardless of Freehold or Leasehold will need consent from state authority before disposing the land, .


What's the difference between master, strata and individual title ?

Is OUG freehold with or without consent ?

Master title is when a piece of land has not been surrendered to land authority for subdivision. Strata title follows schedule H or basically is only a title for "built-up". While individual title is when that particular lot has been divided into parcels.

Individual title is preferred amongst the baby boomers, as it is actually a grant on the piece of land. Land is valuable.

Strata title is preferred amongst the yuppies,gen-y and the likes nowadays, especially for security purpose, maintenance of common areas, exclusivity and etc etc. DPC is an example of good landed strata. You won't end up seeing a row of DSLs with different facades.

OUG should be Freehold. You gotto check your title under "sekatan-sekatan kepentingan". If free from consent, it should be stated "Tiada".

Wow,I just felt a tremor here in Wisma menjalara moments ago. Building shaking for 4-5 seconds. I think earthquake somewhere in Indonesia again. Lets read the newspaper tomorrow.

Chin Kim Keong wrote:

Individual title is preferred amongst the baby boomers, as it is actually a grant on the piece of land. Land is valuable.

Strata title is preferred amongst the yuppies,gen-y and the likes nowadays, especially for security purpose, maintenance of common areas, exclusivity and etc etc. DPC is an example of good landed strata. You won't end up seeing a row of DSLs with different facades.



Can you simplify your explanation ?

Is this what you are saying ?

Individual title is mostly for landed properties ie. Double storey houses, bungalows etc.

Strata title for condos, apartments etc.

Am I correct ?

yes.

But strata title is also applicable to landed nowadays. it is called landed strata. Instead of building it vertically, it will be built horizontally. In this instance, you don't actually own the land.

Hi all,

Me and colleagues are looking into the possibility of buying a piece of land (leasehold) to build our respective homes. Will there be any complication in doing so? We will want to segregate the land into smaller parcels for each of our homes as well. Can we do that, according to our land regulations?

We will also require bank loans to finance the purchase of the land as well as for the building costs. As each of us will be looking for different amounts due to different home designs, how do we go about applying for loan?

Can anyone enlighten us on this matter? Your insights will be much appreciated.

Hi,

Can someone confirm that freehold to be converted to leasehold land soon?

This is what i got from online The Star on 2nd Dec 2010 with heading 'Lease Extension to 99 Yrs'.
In the article, one part wrote - Asked about cases of 999 yrs lease being given by some state governments, Muhyidding said: ' This policy has been decided by the National Land Council and must be adhered by all state governments."

Errrrrrrr, 999yrs leasehold actually same/considered as freehold right?

thanks

Mickey Boy wrote:
Hi,

Can someone confirm that freehold to be converted to leasehold land soon?

This is what i got from online The Star on 2nd Dec 2010 with heading 'Lease Extension to 99 Yrs'.
In the article, one part wrote - Asked about cases of 999 yrs lease being given by some state governments, Muhyidding said: ' This policy has been decided by the National Land Council and must be adhered by all state governments."

Errrrrrrr, 999yrs leasehold actually same/considered as freehold right?

thanks

Yes indeed

Mickey Boy wrote:
Hi,

Can someone confirm that freehold to be converted to leasehold land soon?

This is what i got from online The Star on 2nd Dec 2010 with heading 'Lease Extension to 99 Yrs'.
In the article, one part wrote - Asked about cases of 999 yrs lease being given by some state governments, Muhyidding said: ' This policy has been decided by the National Land Council and must be adhered by all state governments."

Errrrrrrr, 999yrs leasehold actually same/considered as freehold right?

thanks

Hi Mickey,

You are correct with your question about 999 years is almost considered freehold due to long period that will benefit almost 10 generations of your siblings.

However, as i read the article, there are still qualifications and necessary procedures that needs to follow before qualifying for such long term period....

Nevertheless, this will give Malaysian residents opportunity to own property in a long period of time with their siblings...

Cheers!

To some extent, whether it be freehold or leasehold, once the land is alienated from the
State, the proprietorship of the land is no longer State owned, henceforth, the categories into
residential or commercial buildings with land.

The development is accorded title since private ownership is legal and under the HDA, private owners are
protected. The property price includes the land, hence the premium charged towards cukai tanah is
allocated and if not mistaken, reviewed once every ten (10) years.

Therefore, under the perview of land premiums per se, the review conducted on leasehold or freehold properties
should be systematically be similiar if not, the same.

However, lately, we have heard of some land premiums going at scales that are quite unpredictable.

Since land premiums are taxable, would it not be accurate for private ownership of properties be accorded some
degree of certainty in knowing how such land premiums are charged and according to what criterias.

Location could be a factor but surely the scale of calculation must be set, or else, there will bound to be delay and uncertainties, what more, if some developers could be having encumbrances and the likelihood of land conversion from agriculture land to land with building may still be forthcoming despite the project being completed after more than five (5) years !

For delayed and abandoned projects, this problem could even be more acute and seems land premiums loaded on land titles are becoming a major concern for folks in towns and cities.

Hope some brave quarters will come forth with a real proposal to promote the awareness of getting some public response for a matter so dear such as land titles etc.