Guide to owning land in Kenya as a foreigner
Buying land in Kenya as a foreigner is possible but subject
to several limitations of property ownership. These
limitations can be found in the Constitution (2010) and the Land Control Act
(Cap 302). According to 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 99 years”. On expiry of the leasehold term, a renewal of the lease may be sought.
On
the passing of the Constitution in 2010, any foreigner holding freehold land in
Kenya had their title automatically converted to a leasehold title with a
remainder interest deemed to expire after a maximum of 99 years. Thereafter, the interest reverts to the Government of Kenya which holds the reversionary interest.
Top factors to consider before investing in property in Kenya
Can foreigners Agricultural land in Kenya?
Agricultural
land or land within land control areas in general terms, is land that is
situated outside a municipality, a township, or a market or land that the
Minister of Lands designates as being controlled and subject to the protections
in the act.
Under the Land Control Act (CAP 302), foreigners are not permitted to own agricultural
land unless a special dispensation has been obtained from the President or if the land is an
initial grant from the government.
The greatest exemption is that a public company can own agricultural land even if
some of its shareholders are foreigners.
What if a
foreigner partners with a Kenyan private company to buy land?
For a
company to own freehold property, the company must be FULLY owned
by one or more Kenyan citizens.
A company for purposes of property ownership, is regarded as
a Kenyan company only if it is wholly owned by one or more Kenyan citizens.
Therefore, a private company with one or more foreign shareholders is regarded as a foreign
company and cannot own freehold land.
Can foreigners own freehold land
through a Trust?
A trust is an arrangement where the owner of
property transfers it to the ownership of another person, on condition that the
trustee uses the property only for the benefit of others (the beneficiaries).
In summary, foreigners can own:
·
Leasehold property and can apply for lease renewal.
·
Apply for an exemption to own freehold property and once approved, this
is published in the Kenya Gazette.
·
Own agricultural land indirectly through owning shares in a public
company that owns agricultural land.
Please note that such transfers are still
subject to the normal process of buying and selling land in Kenya. And remember
to pay your taxes! Please note that this guide has only covered land and did not cover other real property like apartments, houses and other immovable property. A specific guide is available for such including how a foreigner can transfer property to a Kenyan citizen.