Investment & Financial Planning

Understanding Leasehold vs Freehold Property in India for NRIs

By Manish Prajapat |Last Updated: February 5, 2026

Understanding Leasehold vs Freehold Property in India for NRIs

When investing in Indian real estate, you often hear about leasehold and freehold properties. The key difference between leasehold and freehold properties is the issues associated with ownership and land control. For NRIs, understanding the Indian property structure is vital for making informed investment decisions. It impacts their investment stability, legal position, and market value.

Further, to help you out, this blog provides you with complete information on leasehold and freehold property types in India for NRIs, along with their key factors. So read on and clear all your doubts related to it.

Manish Prajapat(Tax Expert)

Mr Manish is a financial professional with over 10 years of experience in strategic financial planning, performance analysis, and compliance across different sectors, including Agriculture, Pharma, Manufacturing, & Oil and Gas. Mr Prajapati has a knack for managing financial accounts, driving business growth by optimizing cost efficiency and regulatory compliance. Additionally, he has expertise in developing financial models, preparing detailed cash flow statements, and closing the balance sheets.

Frequently Asked Questions

The property conversion from leasehold to freehold does not attract any capital gain tax. However, you need to pay registration charges, stamp duty, and applicable conversion fees. Further, tax is imposed only when the property is sold or there is rental income generated from the property.

No, NRIS don't need to present physically in India for leasehold-to-freehold conversion. The conversion process can be done through a registered Power of Attorney (POA) holder, provided all requested documents are apostilled or notarised properly.

Yes, NRIs, subject to the local development authority and land-owning body rules, can convert a leasehold property into a freehold property in India. The process generally includes application, conversion charges, and registration of a conveyance deed.

Generally, for NRIs, freehold property is considered better. It is because it provides them with permanent ownership, fewer legal restrictions, and higher resale value. Although initially, leasehold property may be cheaper, it comes with renewal conditions and time limitations.

Yes, under the FEMA regulations, NRIs can buy both leasehold and freehold commercial and residential properties in India. However, there are restrictions on them for purchasing any type of plantation property, which includes agricultural land and a farmhouse.

Understanding Leasehold vs Freehold Property in India for NRIs

Frequently Asked Questions

Are There Any Tax Implications for NRIs When Converting a Leasehold Property to Freehold?

Do NRIs Need to Be Physically Present in India for Leasehold-to-Freehold Conversion?

Can an NRI Convert a Leasehold Property Into a Freehold Property in India?

Which Is Better for NRIs: Leasehold or Freehold Property?

Can NRIs Buy Both Leasehold and Freehold Property in India?

Understanding Leasehold vs Freehold Property in India for NRIs

Frequently Asked Questions

Are There Any Tax Implications for NRIs When Converting a Leasehold Property to Freehold?

Do NRIs Need to Be Physically Present in India for Leasehold-to-Freehold Conversion?

Can an NRI Convert a Leasehold Property Into a Freehold Property in India?

Which Is Better for NRIs: Leasehold or Freehold Property?

Can NRIs Buy Both Leasehold and Freehold Property in India?