Freehold vs Leasehold Property: What It Means in Gurgaon
Short answer
Freehold means you own the land and the building outright and forever. Leasehold means you only hold the right to use it for a fixed term while a lessor keeps the land. In Gurgaon most homes, DLF phases, licensed colonies, builder floors and plots, are freehold, so leasehold is the exception to check for.
Freehold and leasehold describe who owns the land under a property and for how long. With a freehold property you own both the structure and the land it sits on in perpetuity, with full freedom to sell, mortgage, gift or bequeath it through a registered sale deed and no one else's permission needed. With leasehold you own only the right to use the property for a fixed lease term, commonly 99 years, while the land stays with a lessor such as a government authority or the original owner. Selling or sub-leasing can require the lessor's consent, and the lease eventually expires or has to be renewed.
In Gurgaon the large majority of homes a buyer looks at are freehold. DLF phases 2, 3 and 4, licensed private colonies approved by Haryana's DTCP, independent builder floors, residential plots and most apartments, where you get the flat plus an undivided share of the land, are sold freehold on a registered sale deed. Leasehold is the exception here. It shows up mainly in some commercial, industrial and institutional allotments, SEZ units, and older HSVP (formerly HUDA) plots that were allotted on a conditional basis.
Before you buy, read the title document. A registered sale or conveyance deed points to freehold; a lease deed or an allotment letter carrying a term and conditions points to leasehold. For anything leasehold, check the years left on the lease, the transfer and renewal rules, and whether it can be converted to freehold. HSVP plots can usually be regularised to freehold through a registered conveyance deed and a conversion charge based on plot size, location and the applicable collector (circle) rate. Avoid GPA sales, because a general power of attorney does not pass valid title after the Supreme Court's Suraj Lamp ruling, so insist on a registered deed in your own name.
The cost of registering the transfer is the same whichever tenure you buy. Within Gurugram's urban limits Haryana stamp duty is 7 percent for a male buyer, 5 percent for a female buyer and 6 percent for joint male and female owners, plus a registration charge set on a fixed slab that tops out at 50,000 rupees, a ceiling any Gurgaon home comfortably reaches. Converting a leasehold HSVP plot to freehold costs extra, namely the conversion charge plus stamp duty at those same rates and registration on the fresh conveyance deed. Rates and charges change, so confirm the current figure with the sub-registrar or your advisor before you transact.
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