The lessee under a lease agreement holds a leasehold estate in land under the common law. The lease must be a lease for years. The estate arises because the lessee is granted exclusive occupation of either part or the whole of the premises. However, an investor is more concerned with the lessee's economic interest in the property than his/her legal interest.

Leasehold estates in perpetuity have been granted under NSW legislation and are the highest form of leasehold estate. The ACT leasehold system of 99 years is also a very high estate.

A lease for life is also a leasehold estate.