Skip to main content
WUHLD
← Back to glossary

Freehold

Also known as: Freehold Property, Absolute Ownership

Definition

Freehold is a type of property ownership where you own both the building and the land it stands on outright, with no time limit and no ground rent to pay.

Understanding freehold ownership is essential for estate planning because it affects how you can leave property in your will and how your executors handle your estate after death.

What Does Freehold Mean?

Under English and Welsh law, freehold is legally known as an "estate in fee simple absolute in possession" established by the Law of Property Act 1925. It's one of only two forms of property ownership in England and Wales—the other being leasehold. While the Crown technically owns all land, freehold represents the closest form to absolute ownership available to individuals, giving you indefinite ownership of both the building, the land beneath it, and the airspace above.

Most houses in England and Wales are sold freehold, while flats are typically leasehold. However, flat owners can have "share of freehold" arrangements where they hold a leasehold interest in their flat but jointly own the building's freehold through a limited company. Freehold owners don't pay ground rent or service charges to a landlord, and they have complete responsibility for maintaining their property. You can make alterations subject to planning permission, and you can sell, gift, or leave your property in your will without needing anyone's permission.

Sarah owns a freehold house in Manchester worth £280,000. She owns both the house and garden completely, pays no ground rent, and can leave the property to her children in her will without needing anyone's permission. When she dies, her executors simply register the property transfer at the Land Registry after probate. James owns five freehold buy-to-let properties worth £850,000 total. Because all five are freehold, he can leave specific properties to specific beneficiaries—two to his eldest son, two to his twin daughters jointly, and one to his current wife—giving him complete flexibility in estate planning.

Freehold property forms part of your taxable estate for inheritance tax purposes and must be professionally valued during probate. The main residence nil-rate band (additional £175,000 IHT allowance) applies when leaving your freehold home to direct descendants. Unlike joint tenancy where property passes automatically to the surviving owner, freehold held as tenants in common allows each owner to leave their share separately in their will. Executors find freehold property simpler to deal with than leasehold because there's no freeholder to notify and no lease assignments required.

Common Questions

"Can I pass my freehold property to my children in my will?" Yes, freehold property can be passed to anyone you choose through your will. Because you own both the building and the land outright with no time limit, you have complete freedom to leave your freehold property to children, other family members, friends, or charities. The property passes as part of your estate and may be subject to inheritance tax depending on its value and your overall estate.

"Is freehold property better than leasehold for estate planning?" Freehold property is generally simpler for estate planning because you own it outright with no lease complications. Unlike leasehold properties with diminishing lease terms that can lose value, freehold property maintains its value and can be transferred to beneficiaries without concerns about remaining lease years or freeholder permissions. However, both types can be left in your will—freehold just offers more certainty.

"Do I need to update my will if I buy a freehold property?" Yes, you should update your will whenever you acquire significant assets like freehold property. If your will contains a specific gift of your previous property, it won't automatically apply to your new freehold home. Even if you have a residuary clause covering 'all my property,' it's wise to review your will to ensure your freehold property goes to your intended beneficiaries and consider inheritance tax implications.

Common Misconceptions

Myth: Freehold means I own the land absolutely—no one has any claim to it.

Reality: While freehold is the closest to absolute ownership in England and Wales, the Crown technically owns all land. You own an "estate in fee simple absolute in possession" which gives you indefinite ownership rights, but your property remains subject to laws, planning restrictions, compulsory purchase powers, and mineral rights that may belong to others. For all practical purposes, though, freehold gives you complete control over your property.

Myth: If I own a flat, I can't have freehold ownership.

Reality: While most flats in England and Wales are leasehold, you can own a "share of freehold" where you hold a leasehold interest in your flat but jointly own the building's freehold with other flat owners through a limited company. This gives you the benefits of freehold ownership—control over maintenance, no ground rent, extended lease—while accommodating the shared structure of a multi-unit building.

  • Leasehold: The alternative form of property ownership with a time-limited lease, typically requiring ground rent payments and freeholder permissions.
  • Land Registry: The government body where freehold titles are registered and where executors obtain official proof of ownership when administering estates.
  • Title Deeds: Documentary proof of freehold ownership that executors need to locate when dealing with property in your estate.
  • Property Ownership: The broader category covering how property is held, including whether freehold is owned as joint tenants or tenants in common.
  • Main Residence: Your freehold home often qualifies for the residence nil-rate band when left to direct descendants, reducing inheritance tax.

Need Help with Your Will?

Understanding freehold ownership is essential for including your property correctly in your will. Whether you own a family home or multiple properties, getting your property provisions right ensures your wishes are followed and your beneficiaries inherit smoothly.

Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.