Freehold
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
Freehold is full, permanent ownership of land and any buildings on it, held with no lease and no time limit. In a business sale it means the buyer owns the premises outright, unlike a leasehold purchase where the premises are rented. Freehold property can be used as security for a commercial property loan and usually supports a higher LVR than leasehold. When the property and the operating business sell together it is a freehold going concern.
Why Freehold Matters
Freehold ownership gives the strongest security position, which widens funding options and lowers cost of capital.
- Owner controls the premises with no lease to renew or lose
- Stronger security for lenders than leasehold
- Usually supports a higher LVR on a commercial property loan
- Can be sold on its own or as a freehold going concern
- Underpins long-term value rather than a wasting lease term
Common Features of Freehold
- Permanent title to land and buildings
- No ground rent or lease expiry
- Registered on the land title in the owner's name
- Can carry a first mortgage and further security
- Preferred by lenders for commercial property funding
Official reference: moneysmart.gov.au
What does freehold mean?
It means you own the land and buildings outright with no lease or time limit, unlike leasehold where you rent the premises.
Is freehold better than leasehold for finance?
Can I borrow against freehold property?
Yes. Freehold can secure a commercial property loan or carry a first mortgage.
What is a freehold going concern?
It is buying the freehold and the operating business together, covered under freehold going concern.
Does freehold include the business?
Not by itself. Freehold is the property only; the trade is separate unless sold as a going concern.