99-year lease


A 99-year lease, under historic English law, since widely received abroad, was traditionally seen as the longest practical term of a lease of real property without it being considered perpetual. While it is no longer a hard legal limit in most common law jurisdictions today, 99-year leases continue to be common as a matter of business practice. In some countries land reform legislation has resulted in most or all land being owned by the state and leased to users, which often takes the form of a 99-year lease. In this case, the lease is often transferable and treated as essentially equivalent to ownership, at least to the extent that it is the main way in which one may purchase the more or less permanent use of land.
Property scholars describe leasing as a "widespread and highly successful" institutional form that allocates control and risk differently from ownership. Governments have also used 99-year leases for strategic purposes, including the 1940 U.S.–U.K. Destroyers for Bases agreements granting rent free 99-year base rights.

The law

The 99-year term originated as a practical common law choice — long enough to outlast any person involved in the lease, yet finite enough to eventually return control to the landowner or their heirs. The lease typically includes detailed agreements about who handles repairs, pays for insurance and taxes, and controls whether the property can be sold or sublet to others. Commercial ground leases typically place most operating expenses on the tenant through "triple net" arrangements, while giving tenants considerable freedom to mortgage their leasehold interest and sell or assign it to others, usually with the landlord's approval. The structure separates site ownership from building control and cash flows, which is one reason leasing is described by an American property law scholar as "widespread and highly successful."
Termination occurs on expiry, by forfeiture for breach, or by negotiated surrender. In many jurisdictions there are statutory rights to extend or to enfranchise into freehold for qualifying long residential leases.
Ground leases of 50 to 99 years enable capital recovery and loan amortization in a structure that can substitute for an outright sale. In some tax analyses, leases materially longer than a human planning horizon have been viewed as sale substitutes, which is one reason parties often stop at 99 years. In consumer policy debates, the U.K. Competition and Markets Authority concluded that recurring ground rents attached to long residential leases are "neither legally nor commercially necessary," which has informed recent reforms.

United Kingdom

Both 99-year and 125-year leases are standard in many developments, with ultra-long 999-year leases historically used in limited cases. The Leasehold Reform Act 2022 abolished ground rent in most new long residential leases in England and Wales. The Leasehold and Freehold Reform Act 2024 received royal assent in May 2024, expanding statutory lease extensions to 990 years for both houses and flats, and removing the former two year ownership qualification period.
Due to the influence of the ideas of Henry George at the time the Australian Capital Territory was established in the early 20th century, all residential land in the ACT was held under 99-year Crown leases, the first of which expired in 2023.
The 99‑year lease term has also been used in a number of historic colonial and international territorial concessions, including the United Kingdom's 1898 lease of the New Territories in Hong Kong and Germany's 1898 lease of Kiautschou Bay—though such terms have appeared under both common law and civil law systems.
Scotland reformed long leasehold with the Long Leases Act 2012 converting qualifying ultra-long leases into outright ownership on 28 November 2015, and new leases cannot exceed 175 years.

United States

Long ground leases are widespread in commercial development. In the law of some US states, including Alabama a 99-year lease is the longest possible contract for real estate by statute, but many states such as California and New York allow infinite terms. In Kentucky, the maximum lease contract for real estate is 40 years.
Federal regulations governing leases of Indian land contain term limits and, in some contexts, authorize up to 99 years under specific statutes.

Malaysia

In Sabah, Malaysia, the state "Country Lease" is land classified outside of the town area, and leases are either freehold, 999, 99 or 60 years, a land law inherited from the time of the British North Borneo administration, although there are several restrictions for non-Sabahans and foreigners to own land. A similar 99-year lease also applied in neighbouring Sarawak, which inherited the Raj of Sarawak land law, although non-Sarawakians and foreigners are generally prohibited from owning land in Sarawak, with some exceptions to the general restrictions.
Different laws apply to the land tenure in West Malaysia and the Federal Territories, with some federally owned and reserved lands that have not yet been developed with planned development projects for certain reasons that may be leased to qualified parties for a period of not less than 3 years and not more than 99 years.

Hong Kong

Historically, urban leases were commonly 75 or 99 years, while New Territories land was for the period of 99 years less three days from 1 July 1898. Leases expiring without a contractual right of renewal may be extended for 50 years at the government's discretion without premium, subject to an annual government rent equal to three percent of rateable value. In 2024, the Extension of Government Leases Ordinance established a standing mechanism to extend general purpose leases in batches.

Singapore

Most public housing units are sold on 99-year state leases. Singapore government policy emphasizes that this term balances a "home-for-life" with the need to renew the city for "future generations." For selected rehousing under SERS, seniors may opt to purchase replacement flats on shorter leases, including 50 years.

Philippines

In September 2025 the Philippines amended the Investors' Lease Act to permit foreign investors to lease private land for up to 99 years, replacing the previous 50 years plus one 25-year renewal. The new law only extends lease terms but does not permit outright foreign ownership of real property.

History

Long leases developed over hundreds of years within English property law as a way to separate possession and development from ultimate control. The oft-quoted claim that early English law limited leases to forty years comes from the medieval treatise The Mirror of Justices. In Mirror, Blackstone repeats the point, citing Mirror. C.2. §.27, but immediately treats it as doubtful and already obsolete in practice, noting evidence of very long terms and that by Edward III's reign "long terms, for three hundred years at least, were certainly in use." He also links the spread of secure long terms to 21 Hen. VIII c. 15, which protected terms of years from being destroyed by common recoveries. The later convention of a ninety-nine year term did not derive from a hard medieval cap but emerged as a business-law solution once very long leases were both lawful and financeable. In early modern and modern practice, "ground leases" for major developments commonly ran for fifty to ninety-nine years in order to support investment while preserving the reversion, and in some places parties used ninety-nine-year terms with renewable options to approximate perpetuity without violating other rules on alienation.
By the 19th century, the term became a standard instrument exported across the British Empire. In Hong Kong, the 1898 Convention for the Extension of Hong Kong Territory leased the New Territories to Britain for 99 years, and the territory was returned to Chinese sovereignty in 1997 under the terms of the Sino–British arrangements. Similarly, Germany's 1898 lease of Kiautschou Bay from China was also for 99 years, demonstrating that such terms have appeared under both common law and civil law systems.
During World War II the United States and the United Kingdom exchanged 50 destroyers for the grant of 99-year, rent free base leases in Newfoundland and the Caribbean.

Examples