The End of Leaseholds

The Government is proposing to overhaul the leasehold sector and has recently published a White Paper on the matter. They are proposing to abolish the leasehold tenure and replace this with a form of property ownership called commonhold.

Commonhold is a form of freehold which will remove the need for a freehold landlord. Common holder’s will no longer own a lease on the property for a specific number of years, but instead, own the property outright. This is a complete change from the current position with leaseholds originally designed to help manage communal areas. Under the new commonhold system these shared areas will now be owned through a commonhold association by all the property owners collectively.

As an example, if a building hosting five flats has a shared stairwell, gardens and hallway, the individual flats will be owned under commonhold and the shared areas will be held through a commonhold association of which the underlying owners are the individual owners of the flats.

Provided the proposal goes ahead, it will now be more important than ever for tax specialists and accountants to understand the ownership structure of property owned by their clients, in what is already a complex matter.

Further details can be found via the Government website: Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales – GOV.UK

It’s important to note that the details in the White Paper are subject to change prior to approval from Parliament. Whitings LLP property specialists will be continuously reviewing any developments in order to provide accurate and up to date advice to their clients.

Disclaimer - All information in this post was correct at time of writing.