Ground rent
A yearly payment a leaseholder makes to the freeholder under the lease. For most new long residential leases since 30 June 2022 it is limited to a peppercorn (nothing).
In short: Ground rent is a sum the lease requires the leaseholder to pay the freeholder each year. The Leasehold Reform (Ground Rent) Act 2022 set ground rent at a peppercorn, in effect zero, for most new long residential leases granted from 30 June 2022. Older leases keep the ground rent they state.
Selling a homeMoney, tax and insurance
England. Checked against the law on 5 October 2026. Information, not legal advice.
What to check in an older lease:
- The amount and when it is due (the freeholder must send a formal demand before it is payable).
- Review clauses: rents that double every 10 or 15 years can make a flat hard to sell or mortgage.
- Lease extension: a statutory lease extension adds 90 years and reduces the ground rent to a peppercorn.
The ground rent on a flat a landlord lets is the landlord's cost, not the tenant's. When selling, the ground rent is part of the material information buyers need.
Related: Leasehold, Service charge
Where this comes from
Guides on this
Guide
Selling a home that is let: with the tenant in place or empty
Sell with the tenant staying, or empty. Without the tenant's agreement, ground 1A needs four months' notice and cannot be used in the first year. Plus the EPC and the 60-day tax deadline.
Guide
Making Tax Digital for landlords: who, when and how
Making Tax Digital for Income Tax began on 6 April 2026 for qualifying income over £50,000; £30,000 follows in April 2027 and £20,000 in April 2028. What counts, quarterly updates and joint owners.
Guide
Landlord insurance: is it a legal requirement, and what does it cover?
No law makes a landlord in England buy insurance, but your mortgage, your lease and your existing policy may. What landlord policies usually cover, what they leave out, and what you cannot pass to the tenant.
Guide
Letting a home in England while you live abroad
The law of England applies to your let wherever you live: the same safety checks, deposit rules and paperwork. What changes is tax on the rent, an address in England and Wales for your tenant, and who deals with a leak at 2am.
Related terms
Glossary
Capital gains tax 60-day report
When you sell a UK home that is not your main home and owe capital gains tax, you must report and pay it to HMRC within 60 days of completion.
Glossary
Service charge
What a leaseholder pays the freeholder or managing agent towards the costs of the building: repairs, cleaning, insurance and management of the shared parts.
Glossary
Leasehold
Owning a home for a fixed number of years under a lease from the freeholder. Most flats in England are leasehold.
Glossary
Council tax liability
Who must pay council tax on a home. Usually the tenant living there; the owner for an HMO, an empty home or where nobody lives there as their main home.
Glossary
Freehold
Owning a property and the land it stands on outright, with no time limit. Most houses in England are freehold.
Glossary
Making Tax Digital for Income Tax
HMRC's system in which landlords and sole traders over an income threshold keep digital records and send quarterly updates using compatible software.