Ground rent is what a leasehold owner pays to use the land. How reviews work and why they're the main leasehold risk.
Ground rent is the periodic payment made by a leasehold owner to the landowner for the right to occupy the land.
Usually as a percentage of the land value, reviewed at intervals specified in the lease — commonly every 7, 14 or 21 years, though terms vary considerably.
Between reviews the rent is typically fixed. At review it resets, often to current market land value.
If land values have risen substantially since the last review, the reset can be severe. Because reviews are infrequent, a single review can capture two decades of land value growth in one step. Increases of several hundred percent have occurred in New Zealand, and in some cases owners have been unable to afford the new rent or sell the property.
A property with a review due in two years is a materially different proposition from one reviewed last year.
Ground rent is not deductible in the same way for everyone — treatment depends on the use of the property. Get advice.
Current ground rent tells you almost nothing about future ground rent. Model the next review, not today's figure, when running your numbers.
Last reviewed: 1 August 2026 · ---
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