Leasehold title

[Invest]

I have been looking at units and the majority of them are leasehold title or cross lease with a share in a leasehold title, not a freehold title.

What is the problem with leasehold titles? They seem to have a stigma attached to them. The majority of these titles have lease terms for 999 years and no rent is paid for the land, so does the title being leasehold actually matter?

Thanks

[Beano]

You need to read the lease. Even freehold has restrictions on what you can do with your occupation of the land
No one can actually own the land (only the crown can actually own land) hence you need to read the lease to see ehat rights and restrictions on the use of the land.

[brokerman]

Leasehold Title and Cross Lease Title completely different.

Leasehold virtually impossible to finance, Cross Lease no problem, however as above get your legal people to check the details.

[sidinz]

Leasehold Title and Cross Lease Title completely different.

Invest is correct. There are cross-leased leasehold titles.

Invest, most of the stigma attaches to the fact that you don't receive capital gains on the land value, and the fact that ground rent can suddenly rise exponentially at renewal time.

In the case of apartments where there's virtually no land anyway and no ground rent, then no, the above wouldn't seem to apply.

[Ivan McIntosh]

...not to mention stratum estates in leasehold.

As Sidinz said, it all depends on the terms of the lease. Leasehold titles have gotten a bad rap over leases set at 6% of capital land value, which can be huge in today's market, costing up to 100k rent per annum. If the lease says zero dollars that's great....but do check whether the rent ever gets renewed; it might not be zero forever. Example would be the Ngati Whatua land by the old railway station that was rent free for the first 15 years.