The price on the sale agreement is only part of what a property costs. Between signing and getting the title, a series of fees and taxes arrive, and buyers who budget only for the price are caught short. This checklist helps you plan for the whole cost before you commit.

Before you buy

  • Official search. A search at the land registry confirms who owns the property and whether there are charges, caveats or disputes. Do it before you pay a deposit.
  • Valuation. A valuer's report tells you what the property is worth. A bank will require one if you borrow, and it helps you negotiate.
  • Survey or inspection for a building, to find defects before they become your cost.

Costs at the time of purchase

  1. Legal fees. Advocates charge according to a scale based on the price. Ask for a written quote.
  2. Stamp duty. 4% of the value in urban areas and 2% in rural areas; see stamp duty on property transfers.
  3. Registration fees at the land registry, and the cost of a new title or lease.
  4. Land Control Board consent fees for agricultural land.
  5. Rates and rent clearance. The seller should provide a rates clearance certificate; see land rates and county property charges.
  6. Agent's commission, usually paid by the seller, but check the agreement.

If you borrow

  • Loan arrangement fees, valuation and legal fees charged by the lender
  • Insurance that the lender requires, such as life cover and property cover
  • Interest, which for your own home may earn tax relief; see mortgage interest relief for homeowners

Test whether you can afford the repayments with the loan affordability checker and schedule and check the monthly payment before you sign.

After you buy

  • Repairs and fitting out, if you plan to let the property
  • Furniture and equipment for a furnished let
  • Insurance on the building
  • Annual land rates
  • Connection fees for water and electricity if they are not in place

A worked example

You buy an urban house for KES 9,000,000. Stamp duty is KES 360,000. Legal fees of 2% come to KES 180,000, valuation and registration add KES 70,000, and a bank charges KES 90,000 in loan fees. The extra costs are about KES 700,000, nearly 8% of the price. The rental property investment analyser adds such costs to your investment and shows the yield on the full amount.

Why costs matter for tax later

Stamp duty, legal fees and improvement costs form part of your cost when you sell, and reduce the capital gain; see selling a property: the capital gains tax steps. Keep every receipt in one place; the records every landlord should keep shows how.

Plan the deposit and the cash

Many buyers need a deposit before the transfer. A savings and sinking fund tracker keeps a goal in view, and the start-up costs and funding calculator helps you list all the costs and how you will fund them.

Fees and rates are set by law, lenders and professionals and change over time. Ask for written quotes and confirm the figures with your advocate.

Common questions

How much should I budget on top of the price? Add stamp duty, legal fees, valuation, searches, registration, and possibly agent fees, rates clearance and connection costs. Many buyers set aside several percent of the price.

Who pays capital gains tax? The seller. The buyer should still ask for the payment receipt because the transfer cannot be registered without it.

Should I use my own advocate? Yes. An advocate for the buyer protects the deposit, checks the title and prepares the documents, and is worth the fee.