Owning Property in Kenya: How to Go About It as a Foreigner

Question:  Are foreigners or non-citizen allowed to own land in Kenya?

Answer:

Subject to the applicable Kenyan law, non-citizens are free to buy commercial or residential property, especially in major towns, for purposes of capital appreciation or rental income.  They can do so directly or through a private limited company.

Section 40 of the Constitution provides for the protection of the right to own property. Therefore, a state cannot appropriate a person’s property without following the due process, which includes payment of just and prompt compensation to the affected land owner.

Constitution of Kenya, the Lands Act (Act No. 6 of 2012) and the Land Registration Act (Act No. 3 of 2012) has made detailed provisions on the ownership of land by foreigners or non-citizens.  Under the Constitution, a foreigner or a non-citizen can only hold land under a leasehold title for a term not exceeding 99 years.  Therefore, in Kenya, foreigners are not allowed to own freehold titles.

Under the Constitution, where a non-citizen holds title documents for a property under a freehold or absolute proprietorship, the same shall be truncated to 99 years’ leasehold title with effect from 28^th October, 2010.  To date, the process of truncation has not commenced.

For this reason, a developer must apply for and obtain change of user where the intended development is not envisaged within the user contemplated in the title document.

Question: What are the land tenure systems in Kenya?

Answer:

In Kenya, a person can hold land as freehold or a leasehold title which can vary from 33 years, 5o years, 99 years or 999 years. Freehold land can be held in perpetuity whereas leasehold titles expires after the expiry of the terms therein indicated.   Unlike leasehold titles, freehold titles are issued without conditions. Again, unlike leasehold titles, except for the local government land rates, the land owner is not required to pay any land rent to the held lessor (which in most cases is the national or the county government). Titles for many apartments or flats or units of office blocks are normally held under leasehold tenure from the Headless or/the developer or the management company.

Question:  Are leasehold titles from the Government renewable?

Answer:

Pursuant to section 13 of the Land Act, upon expiry of the term of a leasehold title, the owner thereof can make an application to the Ministry of Lands for its renewal. Under the law, the immediate land owner has the rights to be granted an extension of lease provided that he is a citizen of Kenya, has complied with the conditions of the leasehold title and the land is not required by the national or county government for its own use.  This provision implies that non-citizens are not entitled to renewal of their leasehold titles after expiry of the initial term.

Question: Can a foreigner hold freehold land under a company or trust

Answer:

Under the Constitution, a body corporate or a trust is only regarded as a citizen if its shareholders or beneficiaries, as the case may be, are Kenyan citizens. Therefore, these vehicles cannot be used to circumvent the law.  Nevertheless, where a person has purchased a leasehold property in Kenya through a company, he can use this for purposes of application of a Kenyan work permit, which is granted for a term of two years (renewable). A holder of a Kenyan valid work permit for a continuous period of at least 7 years is entitled, on application, to be registered as a Kenyan citizen.

Question: Can a non-citizen own agricultural land in Kenya?

Answer:

Under Land Control Act, non-citizens are not allowed to acquire agricultural land either directly or by buying shares in a private limited company that owns agricultural land. Nevertheless, a foreigner or a non-citizen is free to buy shares in a public company that owns agricultural land. Further, under section 24 of said Act, a president can exempt a non-citizen from ownership restrictions contained in the Act.  A non-citizen can also hold agricultural land if the same is allocated to him directly from the national or county government.

Question: As a foreigner, can I invest for commercial purposes?

Answer:

Yes, non-citizens can invest land in Kenya for purposes of revenue making or generating income. However, it should be noted that the said property can only be invested for commercial purposes and not for purposes of generating personal rental income.