What does leasehold mean?
A leasehold is a property interest that someone holds for a fixed period under a lease rather than owns permanently. The leaseholder may have the right to occupy and use the property and, depending on the lease terms, to transfer or inherit that interest. Leaseholds are especially common in British property law, where long leases can sometimes be extended or converted into a freehold. The term can also describe the tenure itself, as in “a short leasehold,” or a property subject to a lease, as in “the property is sold as leasehold.” A leasehold therefore differs fundamentally from freehold ownership: it grants rights for a defined term, and the lease may impose obligations such as payment of rent or a ground rent.
nounA property interest held for a fixed period under a lease rather than owned outright. It may include the right to occupy and use the property and, depending on the lease, to transfer that interest to another person.
- An estate or property interest held under a lease for a specified term.
- The tenure or condition of holding property in this way.
"They purchased the leasehold on the apartment, giving them the right to live there until the term ended."
"The building is subject to a long leasehold, and the owner must pay an annual ground rent."
"A leasehold can sometimes be extended or converted into freehold, depending on the applicable law and the terms of the lease."
Plural refers to multiple leasehold interests or properties held under leases.
"The portfolio included leaseholds on several commercial buildings."
A leasehold can be valuable property in its own right, but its eventual expiration is built into the bargain.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does leasehold come from?
The word combines lease and hold, reflecting the idea of holding property through a lease. Lease comes through Anglo-French from Latin laedere, meaning “to injure” or “to harm,” in the sense of taking property temporarily under agreed terms; the modern sense of a contract granting use of property developed from that earlier usage. Leasehold combines this word with hold, and related forms include lessee, the person who receives a lease, and lessor, the person who grants one.
Related word forms
How leasehold is actually used
The term is especially common in British legal and property usage, but it is also used in US English. It describes the holder's legal interest in property for the lease term, not simply the physical possession of the property.
Easily confused with leasehold
A leasehold is held for a set period under a lease, whereas a freehold is owned outright without a fixed expiry date.