Ch9 freehold and leasehold

Discussion in 'CP1' started by Komal Gupta, Jan 28, 2024.

  1. Komal Gupta

    Komal Gupta Keen member

    Here I do not understand "leasehold provides higher initial rental yield and capital loss if the lease is held till termination date."
     
  2. Aman Sehra

    Aman Sehra ActEd Tutor

    Hi Komal,

    The capital loss relates to the idea that at the end of the lease agreement, the leaseholder has no interest left in the property - it goes back to the freeholder, so a capital loss.

    As such, the rental yield would be higher for a lease than a freehold, to allow for this.

    Thanks
    Aman
    ActEd Tutor
     

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