We know the basic definition of LEASEHOLD. Most would be 99 lease and the property do not belong to the buyer "forever". The transfer of ownership is a little more troublesome and over the years, the lease reduces and the next buyer tend to be pushed away as the remaining lease is lesser. Given a choice for an identical location and pricing, we would no doubt choose FREEHOLD over LEASEHOLD. Unfortunately property often comes with different considerations such as entry price, size, location, timing, etc.

There will be time when choosing a property is not as simple as choosing a FREEHOLD over LEASEHOLD. I wonder how much does a LEASEHOLD status would affect your purchasing decision? Say from a sub-sale serviced apartment perspective?

for me, yes, i always prefer FH

This post has been edited by ecin: Jul 26 2013, 11:04 AM

i have the same dilemma.

From what i gather, it may not have any impact to you now but it would have an impact to your children if you decide to give them.

the thing about leasehold which i managed to find out is that if i want to renew the back to 99 years, is going to cost a bomb. if i am not mistaken, the calculation is 1/4 of the current market price x the no. of years you want to renew / 99 years...

e.g. balance of leasehold is 20 years and the property cost is RM1 million

to renew back to 99 .....RM1 mil *1/4 * 79/99 = RM200k

I will try to do everything when I am still young. I don't want any trouble with my house when I get old already so FH.

is this calculation correct?

If the price is fair, concept and location is good, I never worry of the Leasehold.

Sooner, most people would not mind the Leasehold prop as they find it much tough to find a Freehold price tag properties based on same size, similar location and aimilar development concept.

Always go with Freehold if possible unless budget constraint or for purely rental play/short-term capital appreciation.

It's the mentality that affects the difference between FH and LH. Long term wise it does affect the value. Eg. Sri Petaling vs OUG

Why people buy leasehold? because either:

1) like freehold but no money
2) like the area and area mostly leasheold props like puchong
3) dont care about props investment. just want for own stay


if you are a non-bumi not so much of a big deal. if you are a bumi, a bit of a big deal if wanna sell to non-bumi. can still sell but u have to be a bit rajin together with your lawyer etc. of course if have money, go for freehold better.

Actually is base on land value by the time u do renewer . If I am not mistake eg ; 200psf for the land value = 200x 1/4 x land size x how many years u extend / 99 .
I try not to buy LH , don't know by the time expire what is the value for that land , must be rocket high .

This post has been edited by skcJVN: Jul 26 2013, 11:40 AM

leasehold for own stay and freehold for investment

After stay in freehold landed for 14 yrs, I move to a new leasehold house.
IMO, given other factors are constant
1. Freehold landed better than leasehold landed
2. Leasehold landed better than freehold townhouse & freehold strata
3. Freehold strata better than leasehold strata

However if in the same category, leasehold landed / strata is >20% cheaper than freehold landed and strata, I will definitely buy leasehold. My leasehold property has appreciated 39% while the freehold house (in same category) only appreciate 24%. Area : Bdr Kinrara

This post has been edited by UFO-ET: Jul 26 2013, 11:48 AM

If can shorten the time of title transfer, I don't mind to get LEASEHOLD..

leasehold effect not really show yet as people tend to look only in the short term.

however, once in future where land is rare and government decide not to renew your leasehold so that it can be sold for money or for other reasons and you are old and can't sell the property for money, THEN only you will feel the bite of leasehold property

selangor now very fast bro.

True... im one of them who bought leasehold on september 2012 and till now havent get my keys...

How fast bro?

for long time price of land are quite cheap but in near future I think it will increase a lot, this will be effected so much when you renew in future.

Pls do research in other country like China, Singaopre, HK etc
When land / land supply become scarce, the reducing in the lease will be accommodated by the increase in land value.
Many houses in Singapore which has lease <30 yrs are selling like hot cakes, my Singapore client has let go a factory (with 1 acre of land) with lease remaining for 7 yrs, sold at $3.2 mil last year. The lease can't be renewed anymore. If not mistaken, China lease is only 40 yrs, our 99 yrs lease is indeed very good already
Freehold is important but not the sole factor for house. Land is more crucial

This post has been edited by UFO-ET: Jul 26 2013, 12:12 PM

If I am not mistaken, even if FREEHOLD property if government wants your land there is nothing you can do about it. They just need to compensate you. Same if government dont want to renew your LEASE, you still be compensated, but LEASEHOLD compensation might be lower. Still my opinion only.

Compulsory Acquisition Act

After 15 to 20 years, most condominiums or apartments are so run down that it makes no difference whether it is freehold or leasehold - nobody wants to take over or buy unless it is dirt cheap. Different story when it comes to landed - better to have freehold as most owners will sell or renovate after 10 to 15 years.

Yup. My friend buy leasehold landed below 6 month already can get key.

where is your place?
y so long?

I think China is 70yrs..
In Spore, either 99 or 999yrs..and their car also "leasehold", 10 yrs only

Its a condo in selangor... the owner havent get strata title... need to do double transfer... have no idea when can get my keys...

Not easy to invoke such law unless the state government prepare for backflash. I m not sure what they mean land value and not property value.

measurement are:

a) Compensation to be paid must not be only for the Land taken; and
b) Compensation to be paid must also be for other losses suffered in consequence of the compulsory acquisition of the Land.

http://www.nst.com.my/red/cover-story-what...rnment-1.178872

Lease hold less than 60 years , new buyer difficult to get loan from most of the bank .

also remember the state and federal government can be taken to court or can be sue.

If bank can solve this issue and our g can shorten the time of double transfer, subsale definitely can significant increase!

Agreed!!

Dont think high rise building can last for 99 years, so why bother?

Anyone here know about leasehold properties in oversea, usually how long can it be done in transferring that lease to another?

This post has been edited by 37 Exposures: Jul 26 2013, 01:27 PM

wah u made me want to open a thread:

In 15 years, what will happen to your high rise, rental and capital appreciation.

In 15 years, what will happen to your landed, rental and capital appreciation.


Imho, for landed in 15 years, rental will keep up with your installment and also capital appreciation especially those fng and gng. for high rise, rental roi can be a bit high but will stagnant and may stop altogether if the building is not maintained properly (malaysia maa). capital appreciation would have stopped yearsss ago.

This post has been edited by AMINT: Jul 26 2013, 01:31 PM

But for landed in Selangor still got many rent out less than montly installment!
RM1100-RM1500 only

old landed u are referring to. Nowadays ppl who rent prefer lifestyle concept living as well, condo used to offer that a lot. However with the rise of lifestyle community concept in landed properties, the rent for these kind of landed will catch up to condo.

However, old landed have good appreciation typically based in good location and own stayer can always demolish and rebuild. Rental ROI, not so much unless you found some hidden gem which sell at reasonable market price. I have 40 yo landed which is rented out and covers installement...

Freehold landed is a gem!

This post has been edited by SongSongLai: Jul 26 2013, 02:24 PM

I dont mind buy leasehold. As long that property produce good income. And above 60 years.

The problem is cant find hidden one . Sigh !

Some people buy a "ugly" single storey bungalow in good lacation then demolish it and build a new 3 storey bungalow!

The essence is you can't buy surrounding environment, I call it X-Value
You can spend 10 mil to rebuild yr mansion, but your neighbour is still a single storey damn ugly bungalow
The truth is lot of new bungalows built by owner himself are old fashion, ugly

My Fren bought a piece of bungalow land measured 6K l/a, designs and builds his own bungalow, he purchases all the building materials and engage foreign workers to do, he claims that he saves 500K on building cost, total spend 1.0 mil in building, but in my eye, the building is very hard to sell even it is brand new, it only worth max 500K in the eye of a new purchaser, it is very hard to sell if the bungalow is old fashion

My advise : my fr developer, it synchronize all the pattern

This post has been edited by UFO-ET: Jul 26 2013, 02:51 PM

WOW! This is very very good way of looking at leashold. I never thought about it that way. 99 years, land scarce population increase..inflation some more. So dont care if leasehold or freehold. Just buy. Just pray that the government dont take the land.

it can also be a scenario that your neighbour also demolish everything and rebuild the bungalow to a 3 storeys or he sells to a buyer. the buyer will rebuild. you can see this in subang jaya ss18 semi ds and ss19 bungalows.

Good luck suing Bee End government. You can never win. Dont know what happened to that Johor area where they want to take the land for oil and gas factory or something. I think the place was Pengerang? I forgot.

wonder if leasehold can be disposed as easy as freehold? anyone has any experience?

wonder how many buyers will be discouraged by the leasehold factors for subsales

from sub sale perspective, yes..how many years remains on the property plays an important role in the property value

I bought leasehold landed over 60yrs remain bcoz good location and cheaper. Freehold way too pricey and location can be far away for some. I hate to stay in neighborhood with little tenancy too. Most new properties are bought for flippers and need some times for actual ppl come move in.

Would you pay for a freehold bandar utama house or leasehold parkville house?

Would you pay for a condo in 9 Bukit Utama or Armanee Terrace 1? Assuming all factors are constant and you have the cash. Please give rationale.

good location but cheaper . why ? bcos LH loh . that is the reason some ppl don't go for LH .

u can do it if u cash rich , demolish n rebuild all in cash ,don't think u can get loan to do it .
if I cash rich till that level , I prefer to invest 2 -3 new launch better . lol

For me, i prefer FH as my first house then the subsequent doesnt matter much either LH or FH as long as i dont stay or keep them too long. At the end, i keep all FH and dispose LH.

This post has been edited by yang1976: Jul 26 2013, 09:04 PM

My qs friend told me 600-900k can build a good quality 3 storey bungalow

Bungalow, I always advice just buy land and build by yourself. all bungalows with the same architect look very boring. Rich people should not wear uniform..

leasehold can be convert to freehold....... just go & pay the premium laa......

oh really ? perak pkr no more in power ledi.

Leasehold converted to freehold, Chong_lc? I thot you can only extend the leasehold (or rather renew the leasehold) with a premium....

If not mistaken, it is based on the land size value by the government authority ( not self valuer ) and not the property cost / value or not including the building cost.

Assume the balance of the lease period is 20 years, assume the RM1mil superlink land size is huge at 2000 sq ft and the current market value for the land is RM 200 psf. ( it should be much lower by the the land only has 20 years lease remaining ) and I was told that the State Authority normally value it much lower than the market rate by the valuers firm.

The formula should be ;

0.25 x 0.01 x 79 ( years ) x 200 x 2000 = RM 79,000

The other cost would be RM 500 burial cost, lawyer fee of RM 1000-2000 and Admin Cost of estimate RM 500-2000 ... I don't think it is RM 200k high.

Btw, if a 2000 sq feet land area leasehold linked house is cost RM 1mil with lease remaining 20 years, to spend RM 85-90k for the renewal to 99 years is worthy and ultimately, the property may shoot up to > RM 1.5mil ( just my imagination )

In the other way, if a leasehold land prop with less than 20 years remaining is worth RM 200 psf, then the value of the land itself is much higher with 99 years renewal bcz market value is higher than State Authority value.

Under Selangor State, the renewal is under promotion of only RM 1,000, provided you do not sell the property and allowed to pass to the family members. Meanwhile, if you do not wish to activate this option, you can have the next option of paying full premium ( currently with 30% discount ) and can sell the property immediately.

IMO, as long as the state government is willing to renew the lease extension, it is worthy if your property location is ideal and the market value is good if 99 years conversion successfully done.

Maybe bro Chong's property is in PJ?

How about the lease extension or PG? Same as Selangor?

how you got your calculation?

my was based on this article.

http://www.theedgemalaysia.com/highlights/...ust-rm1000.html

i totally agree wif u! for condo, doesn't matter FH or LH...

Hi, may I know why do you say Leasehold Landed better than Freehold Strata? When you say strata, does this apply to gated & guarded landed strata too? thanks.

JOHOR BARU (July 23, 2013): The Johor government has no intention of extending the duration of the land lease to industries at the Larkin industrial area which is scheduled to expire in another 15 years.

Menteri Besar Datuk Seri Mohamed Khaled Nordin said this was to enable the state government to use the land to build housing projects for the people.

In fact, the state government had identified the agency which would be entrusted to carry out the project, he said at the breaking of fast at the Abidin Mosque, Taman Sri Skudai here, yesterday.

He said with the lease tenure to expire in another 15 years, it would give ample time for the industries to look for new locations to carry out their operations.

At the function, Mohamed Khaled presented Hari Raya contributions to 144 residents of Taman Sri Skudai, comprising the poor, senior citizens and orphans. – Bernama
(Taken from The Sun Daily)

for me...to buy leasehold is same as renting.....coz i dun feel like it belongs to me at all.
better rent and i can rent a new house every few years
so i ll only buy freehold.

People who said LH dont matter are either agents or owners vested in such properties.


FH means you own it. LH means you are renting it on long term basis. Doesn't take a genius to figure out which is better.

Since there is choice, I would definitely go for freehold..

TRUST ME! EVERYBODY does concern especially when it come to own stay!

Condo A = Freehold
Condo B = Leasehold

Condo A and Condo B is a newly build condo situated right beside. And u going to choose between these 2 whether for own stay or investment, Mark my WORD, u CARE!!! of coz is before you factor in the price, layout, maintenance, blah blah blah...

Because,
-you concern your family, wanted them to at least have a place to stay
-you can collect rental for One thousand year or even more!

Honestly...Real Estate in Malaysia.. Location and Accessibility is the main primary factor.. And of course price... In order to choose a place for own stay...

Leasehold or Freehold is just minor minor factor... The cons is that... You only pay extra premium upon lease renewal...

It can also be observed in the market that leasehold properties and freehold properties have an almost compatible prices nowadays..

And besides there will definitely be building depreciation rate and obsolescence..

Nobody will stay at a property more than 10 years nowadays...

Just my 6 cents

Are you serious? Are you very young?

This is leasedhold on industries area. This is not for residential purpose. Make sense if the government wants to take it back AND build residential.

You guys are not factoring in this. I believe leasehold for residential, there is no way gov can just take your property like that.

I guess maybe older generation still does.. ....

The point you made is on this Leasehold topic.
Seriously, have you never seen property more than 20 years (not to say 50 years)?

Of course... You think i'm 16..?

I'll be glad.. If i could turn back the time.. Hewheh! No nid to worry about properties and investment.. Just stay for free..

It simply means that.. Property will change ownership.. Transaction.. People tend to buy and stay and sell, and then upgrade again... And the cycle goes over and over again.. UPGRADe..

................................................

'People who said LH dont matter are either agents or owners vested in such properties. "
Is this equivalent to, people who said FH are definitely matter or important when buying decision comes in, are either agents or owners who vested in such properties?

Few years back, I always try my self not to buy any LH prop. That time, FH prop still low and affordable, I avoid all the LH possible, same goes to most buyers. But there is no definite answer. LH got it's own advantage of low pricing and potential to get higher % margin in appreciation.

I bought a IM (FH) for RM 350k back in 2007 and also unexpected, SSM (LH) for RM 230+k during 2009 ...
IM was a medium end condo while SSM only a normal medium cost apartment with so-so quality.
Due to LH, I never expect SS can appreciate more than RM 400k due to too many students, not so good environment for own stay and opposite, Sunway Ridzuan took years to appreciate RM 10-100k and quite rundown.

I end up sold both units, IM for RM 500k and SSM RM 420k in 2011.

IM, appreciated at about RM 150k in 4 years + time ( ave RM 37.5k per year ) while my LH's SS appreciated RM 180k in 3 years time ( ave RM 60k )

Now, I very much like LH if the project concept, location and price is fair and good.


"FH means you own it. LH means you are renting it on long term basis."

What?

Ya mistake, I refer it to highrise strata.
You may not agree

Agree with you.

Both your condos Impian Meridian and Sunway Suriamas are very good investment properties... Should keep it.. Heheheh

Sunway Ridzuan bad management..I think they got probe a few times already..
I dont even know until now, ada strata title or not..

Yes.. Nowadays leasehold and freehold.. Both also almost equally da same...Most important thingy like i said is location and accessibility and affordability in real estate selection.. It's intertwined..

Both freehold and leasehold as per defined in NLC 1965. Only differs in land lease in terms of perpetuity and a land lease to a number of years.. and premium payable upon lease expiry.

In some instances... Leasehold can be converted to Freehold.. Depending on state authority. I have seen conversion of condos land tenure in PJ.. Hahahah,..... Can see it once in a blue moon..

Wow, short form also u can get the project name, hahaha.

Yeah, both are good, but for me, SSM outshine my expectation for IM and probably, IM was my slowest appreciation property, where in fact, I rent out the unit easily at RM 2,500 but I had no regret to sell both due to I used the money for somewhere else and waiting it to harvest up nicely. Or else, my portfolio remains the same.

Any property can give me good appreciation and capital return is good, I dont care whether it help me profit RM 10k or RM 100k, I had set my minimum and maximum target for each investment, of coz realistically. The importance for me, would be liquidity and how fast can flip and rent out.

Ridzuan is a very terrible condo, sigh. That's part of the reason why so many tenants trying to move over to SSM due to better management and improved management from time to time. I hate them until I like them.

Concurred that, location is never go wrong, accessibility, affordability and entry & exit pricing.

Haha.. I've seen few hundreds condos and know very well on prominent locations... ... And doing own research on properties as well.. Especially investment properties.. And valuing the viability on the investment.. ...

Ridzuan: Not to mention.. Ongoing fights from some samseng uncivilized ppl as well..

You must be multi millionaires Flipper now.. LOL

Cause nowadays... PPL not syok with one location, they want to move.. They prefer a new neighbourhood, new environment, lifestyle and new property of course...

With those malls like IKEA.. it stirs up the feeling of wanting to buy new property to have a new ID decor @ new house..

Hahahh!!

And not to mention... Property Upgrader.. From Condo to landed.. And from small landed property to bigger landed property and the list goes on...

And not to mention those property investors.. Too banyak property can decide anytime which property to stay in...

just a question

house for leasehold that was build in 1990 and almost 20+ years now, are possible bank to finance it 90%?

Definitely agree with your statement, thanks for the clarification.

Your lease remaining period, how many years left??

As far as im concern, bank wont finance anything less than 30 years lease remaining period..

Or alternatively, they will tend to slash the margin of financing...

Usually, these people buy these properties in cash.. And after that renew the lease premium at a market value price.

I have an opinion here regarding leasehold. We all know that the developer will be the first to get the 99 years when they acquire the land. Perhaps they need some time to evaluate and construct the properties. By the time everything is completed, the lease might only left 90 years or worst, if the project is delayed, it might eat up another 5 years.

The question now is:
Is it fair to those house buyers where they are left with the remaining years of leasehold due to the inefficiency of the developers?
Should there be a rule where developer should extend back the leasehold to 99 years before handing over to the buyer?

Your opinion guys. And yes, we are always concern on this problem.

Is it fair to those house buyers where they are left with the remaining years of leasehold due to the inefficiency of the developers?
=> unfair

Should there be a rule where developer should extend back the leasehold to 99 years before handing over to the buyer?
=> no such rule

yeah..but if let's say by the time developer hand out the keys to the buyers, the leasehold already left <80 years, for me i think its a bit ridiculous

"... hand out the keys to the buyers, the leasehold already left <80 years"?
=> You can choose not to buy, or I bet you ask every developer they'll also answer you will extend it (this thing is based on Trust, theoretically big name developer seems more trustable, reality is depends on your luck lo)

and, the fact is yes, every new land can extend 1 time

Bandar Menjalara and Bandar Sri Damansara landed properties were converted to freehold approx 2 years plus ago...

for both own stay and investment, lease or free for me no different. The core factor is management, location, neighborhood and potential.

My guess is many years later no one will ever care about such topic, needless to say our next generation. And for me, our child should be cultivated with the right ability to earn their own home.

This post has been edited by cazorla81: Aug 7 2013, 10:41 AM

Totally agreed with you. Children need to learn how to fend for themselve.

All I know is I am not going to live another 90 years so location is key if i want to sell in future.

Extend your lease
By CHRISTOPHER CHAN

IN Selangor, the extension of leases for leasehold properties is governed by the Selangor Land Rules 2003 and Selangor Quarry Rules 2003. There are two options:

1. Pay RM1,000 for the extension of the lease.
This is provided the owner of the property does not re-sell it to a profiteer. However, you are allowed to transfer the property to family members. The state authorities will lodge a registrar caveat on the property to prevent the owner from disposing the property under this option.

2. Pay the full rate of premium for the lease extension.
The owner can then dispose the property immediately after obtaining the new title. Currently Selangor is giving a 30% rebate on the rate of pre-mium under this option.

Under Option 1, after the new title has been issued, the owner would not be able to enjoy the rebate stated in Option 2 should he/she later decide to sell the property on the open market, and would then have to pay the the full rate of premium.

Calculate the premium
If you wish to renew your lease for a residential property in Selangor, the formula for the calculation of the rate of premium is as follows:
Premium = (1/4) x (1/100) x (market value of land in sqft) x (number of years to renew) x (land area in sqft)
Example: For a 3,000sqft residential property in Petaling Jaya with 10 years remaining on the lease, assuming it is valued at RM120 per sqft by the authorities, the lease renewal fee calculation is (0.25) x (0.01) x (120) x (89) x (3,000) = RM80,100. After deducting the 30% rebate, the fee payable would be RM 56,070.

Leases are usually renewed so that there are 99 years of lease on the title. Therefore, if you have 10 years remaining on your lease, you need only pay for an extension of 89 years. The calculation of the rate of premium is on the land itself and does not include the building erected on the land. Also, whether you go for Option 1 or 2, you need to pay a further RM500 as contribution to the state's cemetery trust fund, the Tabung Amanah Perkuburan. The fund is for the state government to buy land for cemeteries.

What to do
The state department involved is Pentadbiran Tanah Daerah Petaling. Among other things, the applicant (who is also the owner of the property) has to:
1. Fill up Borang 12A Permohonan Untuk Menyerahkan Balik Tanah (mengenai kesemua tanah itu) (application to surrender and re-alienate land to extend lease duration).
2. Fill up Borang Perihal Tanah dan Peribadi Pemohon.
3. Fill up Jadual 1 (Peraturan 2) Kanun Tanah Negara Perintah Tanah Kerajaan.
4. Fill up Butir-Butir Permohonan Tanah Oleh Individu.
5. Provide the original title of the property.
6. Provide copies of your quit rent and assessments receipts for the current year.
7. Provide a copy of IC/MyKad. The whole process for the new title to be issued may take approximately two years from the time of submission of the application.

Christopher Chan (christopherchan@hartamas.com) is a registered real estate agent and an associate director of Hartamas Real Estate (Malaysia) Sdn Bhd.

Malaysia indepedent for how many years d??
56years.....
Isit 56 years is a long time for you??
YES.....
If answer is yes,wat for u care about 99years or freehold??
If NO,u think ur broken house after 60years,u pass to your children,ur children still want???

run down? bukit oug condo 20 years d, run down or not?

Ya children still want it FOR SALE LOL