Understanding Leasehold Title in Victoria

Most people buy land in Victoria on a freehold basis — meaning they own it outright. But in some cases, especially on Crown land or certain commercial sites, you may only be buying a leasehold interest, not the land itself.

As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements, Leasehold Title gives you exclusive possession of land for a defined period, but ownership stays with someone else — usually the State of Victoria.

What is Leasehold Title?

A Leasehold Title is a registered interest in land that gives the holder exclusive rights to occupy and use the land for a set period of time.

This arrangement is usually created under a long-term lease (e.g. 21, 50, or 99 years), and that lease is then registered with Land Use Victoria.

The land itself is still owned by the lessor — which might be:

  • The State of Victoria (Crown Land)

  • A local council

  • A private landowner

Leasehold rights are governed by the Property Law Act 1958 (Vic), and any applicable lease document.

Where do you find Leasehold Title?

Leasehold titles are less common but still appear in:

  • Crown land caravan parks

  • Golf courses and foreshore cafes

  • Retirement villages (under leasehold housing models)

  • Commercial shopping centres or industrial parks

  • Aboriginal community land trusts

  • Leasehold land sales offered by government development agencies

If you’re told the “land is leasehold” or the title has a defined end date, you’re not buying the freehold.

Idiosyncrasies of Leasehold Title

  • The land is not yours — the freehold remains with the lessor

  • You usually pay rent or outgoings under the lease

  • You can only sell your leasehold interest (and often need consent to do so)

  • You may face use restrictions, development controls, or public access conditions

  • Many leasehold titles contain re-entry clauses if rent is unpaid or conditions are breached

The lease document rules everything — if it’s poorly drafted, your rights are limited.

How does it differ from other titles?

  • Unlike Torrens Title, you don’t own the land — only the right to occupy it

  • Unlike Strata Title, there’s no shared ownership of common property — the landowner may still control or manage it

  • Unlike Company Title, leasehold rights are enforceable through property law, not shareholder agreements

  • Unlike Adverse Possession, your rights are lawful and documented — but not permanent

Benefits of Leasehold Title

✅ Lower purchase price compared to freehold land

✅ Often in premium locations where freehold is not available (e.g. Crown reserves)

✅ Secure rights of occupation if the lease is long-term and well-drafted

✅ May allow access to government land for private commercial use

Drawbacks and risks

🚩 Lease will eventually expire — no permanent ownership

🚩 May be harder to sell or finance (especially with short remaining terms)

🚩 Subject to rent reviews, CPI increases, and lease compliance audits

🚩 Can’t usually redevelop or subdivide without consent

🚩 Risk of early termination for breach or public interest requirements

Key Takeaway

Leasehold Title can give you valuable long-term access to land — but it’s not true ownership. You must fully understand your lease terms, your rights to transfer, and your obligations to the landowner. Don’t assume you can use the land as if it were freehold.

📞 Dealing with Leasehold Land?

We regularly advise clients buying or leasing Crown land, retirement village units, and commercial leasehold sites. We’ll help you understand what you’re actually buying — and whether it’s worth it.