When buying land in Kenya, choosing between freehold and leasehold can significantly shape your investment. Understanding the key differences and matching them with your goals will help you make a smarter decision. Let us compare both options under Kenyan law and highlight which one best fits your plans.
What Is Freehold Land in Kenya?
Under the Land Registration Act, 2012, and supported by the Constitution of Kenya 2010, freehold means perpetual ownership. You own the land indefinitely unless you choose to sell or transfer it. Only Kenyan citizens or citizen-owned entities can hold freehold titles.
Key Advantages:
Lifetime ownership with no need to renew.
No annual land rent; only county land rates apply.
Ideal for inheritance, farming, or long-term development.
Banks generally prefer freehold for mortgage approvals.
Practical Considerations:
Freehold plots are less common in urban centres; most are rural or peri-urban.
Higher upfront cost but excellent long-term value.
What Is Leasehold Land in Kenya?
Leasehold land refers to land ownership under a lease agreement with the county government or a private landowner, where the right to occupy and use the land is granted for a specified period, usually 33, 50, 75, or 99 years.
Leasehold tenure is most common in cities like Nairobi, Mombasa, and Kisumu, and former municipalities which are now known as county headquarters, like Embu, Machakos, and Nanyuki.
In some cases, leasehold terms can extend up to 999 years, but this applies only to Kenyan citizens. For instance, our land for sale in Juja has a leasehold period of 943 years. Foreign nationals and foreign-owned companies can only hold leasehold land for a maximum of 99 years.
Key Advantages:
Access to prime locations at a lower upfront cost
Lease terms often allow bank financing, given enough years remain
Great for commercial projects and city development
Practical Considerations
Annual land rent applies for the duration of the lease, in addition to rates.
Renewal is typically approved but requires prior planning and payment.
Ownership reverts to the lessor if the lease expires without renewal.
Freehold vs Leasehold: A Side-by-Side Comparison
Feature | Freehold | Leasehold |
|---|---|---|
Ownership | Perpetual | Fixed term of 33 to 99 years |
Common Locations | Rural, agricultural, peri-urban | Urban, commercial, high-growth zones |
Renewal Required | No | Yes, before the lease expires |
Annual Payments | County land rates only | Land rent plus county rates |
Eligible Owners | Kenyan citizens or entities | Kenyans and foreigners up to a 99-year term |
Financing Potential | High | Good if enough lease years remain |
Best Use Cases | Farming, inheritance, self-build | Urban housing, rentals, office space |
Which Option Is Right for You?
Choose Freehold if you:
Want permanent ownership for personal, farming, or legacy use.
Prefer fewer ongoing fees and long-term security.
Are buying outside major cities with a long investment horizon.
Choose Leasehold if you:
Are interested in urban or commercial real estate.
Want access to prime real estate at a lower upfront investment.
Can manage lease renewal and annual rent requirements.
AMG Realtors’ Checklist for Buyers
Verify the title clearly states Freehold or Leasehold.
If leasehold, check remaining duration (best to have 25 years or more for financing).
Plan for annual rent and renewal costs in leasehold cases
Review financing options: freehold may secure better loan terms; leasehold is still viable with a sufficient lease term.
Work with AMG Realtors’ trusted surveyors and legal partners for a seamless transaction.
Final Word: Match Your Land to Your Vision
Freehold equals long-term control, inheritance potential, and a rural lifestyle. Leasehold equals urban opportunity, affordable entry, and growth potential.
At AMG Realtors, we help you find the perfect plot in Kenya that matches your dreams, whether you are envisioning a homestead or a city investment.