It's a fixed long term lease from the state that often comes with a right to renew, not rent you pay to a landlord every month. They can't just decide to take it back and kick you out (unless the government is corrupt, but then it doesn't matter if you fully own it because they will do it anyway).

Eminent domain exists all over the world, you can be kicked off your land even if you own it if the Vogons in government decide they need it for the hyperspace bypass.

Yes unlike in systems where you buy your land and are completely at the mercy of the government not to seize it for eminent domain or taxes or...

Long term government land leases are a good thing. The only thing that they inhibit is dynastic wealth which seems like a bonus to me!