Q&A - Lease Extensions


My Leasehold (share of Freehold) apartment block acquired the Freehold in 2000. The existing Leases have 92 years remaining which are still well above the 80 years ceiling. The Leaseholders are shareholders of the Estate Leasehold and Freehold companies, and they now wish to extend the Leases as a whole job lot.

What is the ideal period for Lease extensions and is there a risk of tax liabilities? If so, what are they, as there are no premiums and all Leaseholders are paying for their own extensions with discount. The ground rents were considered non valid post Freehold takeover, and there is an agreed variable service charge.



The Leasehold Reform Act 1992 gives leaseholders the right to extend their lease, subject to certain criteria’s and is normally for a further 90 years

However, as the shareholders of the freehold company are the leaseholders, then in general, you can extend the lease to, whatever the leaseholder and the freeholder agree.

If there is an increase in the values of the lease or freehold, there may be tax implications, however, if there is no ground rent and no fee from the freeholder for the extension then it’s unlikely.

In effect, you own the freehold. For best re-sale value, I’d go for a long extension.

George Tambaros, General Manager at Hunter Grey

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