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Leasehold Reform (Ground Rent) Act 2022
The Leasehold Reform (Ground Rent) Act 2022 came into force on 30th June. It intends to put an end to ground rent payments on new residential long leases for properties in England and Wales.
The Act will apply to new leases from 30th June 2022 onwards that are for a term of more than 21 years.
The Act will not apply to:
- Business leases
- Statutory leases extensions
- Community housing leases
- Home finance plans
The Act also covers shared ownership properties. You will no longer be required to pay ground rent on your share of the property you are buying – this must be a peppercorn rent only. You will still need to pay rent on the Landlord’s share which can be ‘any rent’ they require.
There is a transition period that applies to leases of retirement homes. The measures will come into force on 1st April 2023.
The Act will not apply retrospectively, so it will not affect leases that are already in existence.
If you are buying a new leasehold property on a development, why not contact our property team and find out how we can help you on 01606 74301.