The Real Estate market in Kenya is booming, and one of the most common challenges is understanding the Kasongo (Taxes) involved when buying, selling, or investing in real estate. It is crucial to understand the taxes and fees involved before making any transaction. These costs help ensure legal compliance, prevent unexpected expenses, and enable informed decision-making. Let’s explore the key taxes the National and County Governments charge straightforwardly.
Stamp Duty
Stamp duty is a tax paid during the purchase or sale of a property, usually by the buyer. It is calculated based on the property’s sale price:
- – Urban areas: 4% of the sale price.
- – Rural areas: 2% of the sale price.
The payment must be made before registering the property’s transfer documents.
Exemptions from Stamp Duty
Certain transactions may qualify for exemptions, including:
- – Transfers of land to charitable organizations as a gift.
- – Transfers of property between spouses.
- – Transfers of family property to heirs after the demise of a family member.
Tip: Ensure the property undergoes valuation to determine the correct stamp duty.
Land Rates
Land rates are annual taxes charged by County Governments for services like water and sanitation. These rates depend on:
- – Location: Proximity to urban areas.
- – Size: The land’s area.
- – Zoning regulations: The designated use of the land.
- – Amenities: Available infrastructure and services.
Urban land typically attracts higher rates compared to rural land. For instance, land in Nairobi is taxed at 8% of its value, while most agricultural land is not taxed.
Note: Failure to pay land rates can lead to penalties or even the county government auctioning your property.
By understanding these taxes and fees, property owners, buyers, and investors can navigate real estate transactions more effectively and avoid unnecessary complications.
