Much of the land in planned cities such as Noida, Greater Noida, Navi Mumbai, Chandigarh and parts of Delhi is leasehold: the development authority leases plots for long terms, often 90 or 99 years, and transfers need the authority’s permission and sometimes a transfer charge. A freehold owner can sell, gift or mortgage without the lessor’s consent.
Leasehold property can still be bought, sold and financed, but buyers check the remaining lease period, any unpaid lease rent, and whether the lessor allows conversion to freehold. Some authorities run conversion schemes for a fee.
In listings, brokers should state the tenure; buyers often assume freehold and discover leasehold conditions late in the deal.
Example
A buyer is choosing between a Noida flat on authority leasehold land at ₹85 lakh and a similar freehold flat in Ghaziabad at ₹80 lakh. For the Noida flat, her lawyer checks the lease deed, the authority’s transfer memorandum requirements and pending lease rent, and adds the transfer charge to her cost before she decides.
Figures are illustrative, not market rates.
Questions about Freehold and leasehold property
Can I get a home loan on leasehold property?
Yes, banks lend on leasehold property, but they check the lease term remaining, the lessor’s permission to mortgage and any dues. A short remaining lease can reduce the loan or tenure offered.
Can leasehold be converted to freehold?
In some cities the authority offers conversion for a fee, for example under the Delhi Development Authority’s schemes. Whether it is possible, and at what cost, depends on the authority and the property.
Sources
- Transfer of Property Act, 1882 — India Code · accessed
Reviewed