diff --git a/lua/codediff/ui/lib/tree.lua b/lua/codediff/ui/lib/tree.lua
index e1485118..b83a11f6 100644
--- a/lua/codediff/ui/lib/tree.lua
+++ b/lua/codediff/ui/lib/tree.lua
@@ -250,11 +250,16 @@ function Tree:render()
   -- Build lines and collect highlight info
   local lines = {}
   local line_highlights = {} -- [line_idx] = { {col_start, col_end, hl_group}, ... }
+  local line_spacers = {} -- [line_idx] = spacer_size
 
   for i, node in ipairs(visible_nodes) do
     node._line = i
     self._line_to_node[i] = node
 
+    if node.data and node.data.type == "group" and i > 1 then
+      line_spacers[i] = 1
+    end
+
     if self._prepare_node then
       local line_obj = self._prepare_node(node)
       if line_obj and line_obj._segments then
@@ -287,6 +292,19 @@ function Tree:render()
 
   -- Apply highlights
   vim.api.nvim_buf_clear_namespace(self._bufnr, self._ns_id, 0, -1)
+
+  -- Apply virtual line spacers
+  for line_idx, spacer_size in pairs(line_spacers) do
+    local virt_lines = {}
+    for _ = 1, spacer_size do
+      table.insert(virt_lines, { { "", "" } })
+    end
+    pcall(vim.api.nvim_buf_set_extmark, self._bufnr, self._ns_id, line_idx - 1, 0, {
+      virt_lines = virt_lines,
+      virt_lines_above = true,
+    })
+  end
+
   for line_idx, entries in pairs(line_highlights) do
     for _, entry in ipairs(entries) do
       pcall(vim.api.nvim_buf_set_extmark, self._bufnr, self._ns_id, line_idx - 1, entry[1], {
diff --git a/tests/ui/lib/lib_spec.lua b/tests/ui/lib/lib_spec.lua
index d396ea65..bed2cb7b 100644
--- a/tests/ui/lib/lib_spec.lua
+++ b/tests/ui/lib/lib_spec.lua
@@ -510,4 +510,17 @@ describe("Tree", function()
     local lines = vim.api.nvim_buf_get_lines(bufnr, 0, -1, false)
     assert.same({ "Changes" }, lines)
   end)
+
+  it("applies a virtual top margin to group nodes that are not the first line", function()
+    local tree = Tree({ bufnr = bufnr, nodes = {
+      Tree.Node({ data = { type = "group" } }),
+      Tree.Node({ data = { type = "group" } })
+    }})
+
+    tree:render()
+
+    local marks = vim.api.nvim_buf_get_extmarks(bufnr, tree._ns_id, 0, -1, { details = true })
+    assert.equals(1, #marks[1][4].virt_lines)
+    assert.is_true(marks[1][4].virt_lines_above)
+  end)
 end)