Thinking about purchasing property in the near future?
One of the most important things you’ll need to consider for your home buying journey is whether a prospective property is freehold or leasehold. Each comes with its own set of rights, responsibilities and restrictions.
Read on to learn more about the pros and cons of freehold and leasehold properties, and find out which is best suited to your lifestyle.
What is a freehold property?
Freehold, sometimes referred to as ‘fee simple’ is the most common type of property ownership in New Zealand. With a freehold property, you own both the land and the buildings that are built on it for an indefinite length of time. Generally you are free to do almost anything you want with the property, provided you’ve obtained consent from the council.
Pros of freehold property
- Complete ownership: You have total ownership of the property and the land it sits on (so long as you keep up with mortgage repayments, of course!).
- Freedom: Because you have ownership of the property, you’re free to use it as you see fit. You can have pets, make changes to the property and do just about anything else within the rules of a Body Corporate, Residents Association or local council.
- No lease: You don’t lease the land – you own it! That means you don’t have to pay ground rent to the owner of the land or worry about renewing the lease.
- Capital gains: The value of land in New Zealand tends to increase over time. As the owner of a freehold property, you can enjoy the full benefits of those capital gains.
Cons of freehold property
- Cost: Freehold property tends to be more expensive than leasehold property because you’re buying ownership of the land as well as the property.
- NOT A CON – Freehold apartments certainly do exist!.
Leasehold
When you purchase a leasehold property, you’re effectively leasing ownership of the property for a set term. You pay rent to the owner in exchange for the rights to the land and buildings on it. When the term of the lease runs out, ownership of the property returns to the freeholder who owns the land. While leasehold property tends to be much more affordable than freehold property, there are significant risks to be aware of, including ground rent increases, which can drive up your total costs significantly.
Freehold available at Kensington Park-in beautiful coastal Orewa.
Here at Kensington Park, we’re proud to offer a range of luxury apartments nestled in a meticulously planned residential development in coastal Orewa. All of our homes are freehold, providing you with all the advantages and peace of mind that come with retaining full ownership of your property.
To book a private tour or to learn more about Kensington Park, get in touch with our Sales Teamteam today on 0800 725 775. www.kensingtonpark.co.nz