Although the Kenyan law allows foreign investors to acquire land in any part of the country, there are several limitations of property ownership in Kenya by a foreigner.
As such, it is important for any foreigner planning on buying land in Kenya to familiarise themselves with the legal provisions in respect of foreigners and property ownership in the country.
Can a foreigner buy land in Kenya?
Yes. Foreign investors are allowed by the Kenyan law to acquire property in the country. The Constitution (2010), the Lands Act (6/2012), and the Land Registration Act (3/2012) have clearly spelt out that any person – either individually or as a group – can buy or own land in Kenya.
Many foreigners buying land in the country have been duped into believing that they cannot own land in their name hence the need to form partnerships with locals. These unnecessary partnerships often lead nasty court battles and must be avoided at all costs.
What are the limitations of land ownership?
Ownership of property in Kenya by a foreigner is usually subjected to certain limitations. These limitations can be found in the Constitution (2010) and the Land Control Act (Cap 302).
According to Article 65(1) of the Constitution, a “person who is not a citizen may hold land on basis of leasehold tenure only, and any such lease, however granted, shall not exceed ninety nine years”. The leasehold is, however, renewable on expiry of the term.
Article 65 clearly states that any document that purports to confer on a foreigner an interest in land with a lease of more than 99 years is considered as conferring on that foreigner a 99-year lease and no more.
What this provision means is that foreigners buying land with leasehold interest of more than 99 years are deemed by law as holding the same property on a 99-year lease.
For the purposes of buying land through a company, the Constitution defines a Kenyan company as an entity that is fully owned by one or more Kenyan citizens. A company with one or more foreign shareholders is regarded as a foreign company and cannot own freehold land.
Article 8(1) of the Constitution clearly states that any freehold interest land in Kenya held by a foreigner shall revert to the Kenyan government and the State shall grant a peppercorn rent (an extremely low rent) for 99 years to the foreigner.
This means that effective August 28, 2010, when the current Constitution was promulgated, any freehold land held by a non-Kenyan is shortened to a 99-year lease with a peppercorn rent.
Can a foreigner buy agricultural land in Kenya?
Under the Land Control Act, foreigners or firms wholly or partially owned by foreign investors cannot acquire agricultural land in the country.
However, the president of Kenya may exempt a foreigner from the above restrictions and this must be done through a notice in the Kenya Gazette.
Foreign investors seeking to buy agricultural land may apply for such exemption, which is usually granted at the discretion of the president.