What is leasehold property?
Also called: leasehold, lease land, 90-year lease, 99-year lease
A leasehold property sits on land you hold on a long lease, usually 90 or 99 years, from a development authority or other owner. You own the right to use it for the lease term and must follow the lessor's rules on transfer, use and lease rent.
Noida, Greater Noida and the Yamuna Expressway area are the clearest example. Their development authorities don't sell land; they lease it for 90 years to builders or individual allottees. When you buy a flat in a Noida project, what gets registered is a sub-lease deed between the authority, the builder and you, and your rights are a slice of the builder's lease. Delhi's DDA and L&DO land, CIDCO land in Navi Mumbai and much of Chandigarh work on similar lines.
The lease brings obligations. There is lease rent, either paid yearly or cleared through a one-time payment. Transfers may need the authority's permission and a transfer charge, and in Noida the authority records the buyer through a transfer memorandum. Changes of use, like converting a residential plot into a clinic, need approval and fees. Breaching the lease terms can, in theory, lead to cancellation.
Buyers worry about what happens when the lease ends. For a 90-year lease starting in the 2000s, that's a problem for your grandchildren, and in practice authorities renew or extend leases. The more immediate issue is money. The authority's dues travel with the property. If the builder hasn't paid the land premium, the authority can refuse to execute your sub-lease, which is exactly what held up registries for thousands of Noida flat buyers until the 2023 relief package.
Before booking, ask for the lease deed, the authority's no-dues letter and the builder's payment status with the authority.
A resale 2 BHK in Noida Sector 75 is priced at ₹95 lakh. Before registry, the seller must clear the authority's transfer charges and any pending lease rent, and the buyer should budget for a transfer memorandum from the Noida Authority to update the records.
Assuming the builder's no-dues letter covers the authority. In Noida and Greater Noida, the land dues owed by the builder to the authority can block your registry.
Questions people ask about leasehold property
Can I get a home loan on leasehold property?
Yes. Banks routinely lend on 90 and 99-year leasehold flats and plots, provided a good part of the lease term remains and the lessor permits the mortgage.
What happens when the lease expires?
The lease deed will say whether it can be renewed and on what terms. Authorities usually renew or extend, sometimes for a fee, but read the renewal clause before buying.