What every land buyer, seller, and developer needs to know—explained with examples
In Kenya, all land is held under one of two tenure systems: freehold or leasehold. These terms aren’t just legal jargon—they determine how long you can own land, what you can do with it, and whether you’ll pay rent to the government.
Here’s a clear breakdown of what each means, how they differ, and which one might be right for you.
1. What Is a Freehold Title?
A freehold title gives the owner absolute ownership of land in perpetuity. You own the land outright, with no time limit, and can pass it down through generations.
Key Features:
- Ownership is permanent
- No lease period or expiry
- No annual land rent to the government
- Subject only to zoning and planning laws
- Only Kenyan citizens can hold freehold titles
Example:
Jane, a Kenyan citizen, buys a 1-acre farm in Nyeri with a freehold title. She can use it, lease it, or pass it to her children without ever renewing ownership or paying annual rent.
2. What Is a Leasehold Title?
A leasehold title gives the holder the right to use land for a fixed period, usually 99 years, after which the lease must be renewed or the land reverts to the government.
Key Features:
- Ownership is time-bound (typically 99 years)
- Annual land rent is payable to the government
- Lease terms may include restrictions on use
- Common in urban areas and for foreigners
- Renewable upon expiry (subject to approval)
Example:
Ali, a Kenyan citizen, buys a commercial plot in Nairobi CBD with a 99-year leasehold title. He pays annual land rent and must apply for renewal when the lease nears expiry.
3. Key Differences at a Glance
| Feature | Freehold Title | Leasehold Title |
|---|---|---|
| Ownership Duration | Perpetual | Fixed term (usually 99 years) |
| Annual Land Rent | Not required | Required |
| Renewal Needed | No | Yes, upon expiry |
| Ownership Restrictions | Minimal (zoning laws apply) | May include use restrictions |
| Foreign Ownership | Not allowed | Allowed (up to 99 years) |
| Common in | Rural/agricultural areas | Urban/commercial areas |
| Title Document | Title Deed | Certificate of Lease |
4. Can Leasehold Be Converted to Freehold?
In some cases, yes—but only for Kenyan citizens and subject to:
- Land location (often outside municipalities)
- Intended use (e.g. agriculture)
- Approval by the National Land Commission (NLC)
- Payment of conversion fees and clearance of land rent
Foreigners cannot convert leasehold to freehold under the Constitution.
5. What Happens When a Lease Expires?
- The lessee can apply for renewal or extension
- The government may reallocate the land if not renewed
- The NLC is required to notify the lessee 5 years before expiry
- If the land is needed for public use, renewal may be denied
6. Which One Should You Choose?
| Scenario | Recommended Title Type |
|---|---|
| Long-term family investment | Freehold |
| Urban commercial development | Leasehold |
| Foreign investor | Leasehold |
| Agricultural land in rural areas | Freehold |
| Buying in Nairobi or Mombasa CBD | Leasehold |
Final Word: Know What You’re Buying
In 2025, understanding the difference between leasehold and freehold titles is essential for every land transaction in Kenya. Always check the title type before buying, and consult a lawyer or land expert if unsure.
