When it comes to real estate investment in the Cayman Islands, interested buyers often ask the same question: What’s the difference between “freehold” and “leasehold” property?
International investors, in particular, are keen to know whether one form of tenure offers clear advantages over the other. In practice, however, the differences are less complicated than many would assume.
“Honestly, I personally do not see any advantages or disadvantages either way,” says John Pohlmann, an associate broker with ERA Cayman Islands who has worked with many clients through both types of transactions.
“Freehold is ownership outright and leasehold is leased long-term from the Crown. However, these leases are decades-long — think 80 to 100 years — so for the life of ownership this really shouldn’t affect purchasers, owners, or investors in any meaningful way,” he explains.
Freehold: Permanence and peace of mind
In the Cayman Islands, most real estate is sold freehold, meaning the buyer owns both the property and the land indefinitely. This form of ownership is considered the most straightforward — offering full control, resale flexibility, and inheritance rights.
This arrangement is especially common for residential areas, private homes, and many condominium complexes.
It’s also deeply secure: ownership records are safeguarded by the Cayman Islands Government’s Lands & Survey Department under the Registered Land Law, giving buyers strong legal protection over their property rights.
From this perspective, acquiring freehold property appeals to those looking for permanence, inheritance planning, or simply peace of mind.
But this doesn’t mean leasehold should be entirely overlooked.
Leasehold: Long leases, strong security
Leasehold properties, by contrast, involve ownership of a unit or dwelling for a fixed period, while the Crown retains ultimate ownership of the land.
Under these arrangements, buyers secure rights to their unit for terms that could span several decades.
Though fewer in number, leasehold properties occupy many of the island’s most coveted addresses, such as Seven Mile Beach.
“A perfect example is the Villas of the Galleon on Seven Mile Beach,” John points out. “The Crown owns the land but you still own your condo. And if for some unforeseen and extremely unlikely situation the Crown would attempt to take that property back, the owners would have to be ‘cashed out’ in a very meaningful and profitable way.”
Leases are typically renewed when they come due, often for another decades-long term. This practice, John notes, is well established in Cayman, which means that leasehold ownership here is far more stable than many overseas buyers might imagine.
Financing and resale
There are also concerns about how leasehold affects financing or resale value, especially for those unfamiliar with Cayman’s system.
“I would argue that they don’t,” says John, when asked whether leasehold makes a difference for banks or buyers down the line.
In practice, local lenders are comfortable financing leasehold purchases so long as the remaining lease comfortably exceeds the mortgage term.
Resale value, on the other hand, is driven far more by location and demand than by tenure. Properties along Seven Mile Beach, for instance, command strong prices regardless of whether they are freehold or leasehold.
For long-term investors, freehold property is naturally more appealing because of its permanence. It offers a sense of legacy and the assurance that the property can be passed down without limitation.
However, seasoned real estate professionals like John caution against assuming that leasehold is somehow a weaker investment.
Leasehold properties — especially resort-style condos with premium amenities — can deliver excellent returns through rental income and capital appreciation. And because leases are so long and renewals are routine, buyers can approach this option with confidence.
A matter of preference
International buyers often arrive with doubts rooted in experiences elsewhere, wondering whether leasehold means “less ownership,” or that property values would collapse as the lease term winds down.
Fortunately, in Cayman, neither is true.
Both tenure types enjoy strong legal protection and a history of steady performance in Cayman’s real estate market. Leasehold titles are fully recognized, transferable, and mortgageable. With terms stretching nearly a century and a track record of renewal, the distinction between freehold and leasehold becomes less a matter of risk and more a matter of preference — that of finding a home that best suits your lifestyle and budget.
Whether you are drawn to the lasting security of freehold Cayman property or to the prime locations often available through leasehold Cayman ownership, our trusted and experienced real estate professionals at Team ERA Cayman Islands will be more than happy to guide you. Contact us today!
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