Stamp duty is a tax on documents that transfer ownership of property. If you buy land or a building in Kenya you will pay it before the transfer can be registered, and it is often the biggest single cost after the price itself.

The rates

Stamp duty on the transfer of immovable property is charged on the value of the property at:

  • 4% for property in urban areas, such as municipalities and cities
  • 2% for property in rural areas

The rate depends on where the property is. Land that has recently been brought into an urban area may attract the higher rate, so check the classification with the land registry or your lawyer.

How the value is set

Duty is charged on the higher of the price in the sale agreement and the open-market value, as assessed by the government valuer. If you declare a price lower than the valuer's figure, you will be asked to pay on the valuer's figure. Buyers should not rely on an understated price, because an understated price can also cause problems later when you sell.

An example

You buy a house in an urban area for KES 9,000,000, and the valuer agrees. Stamp duty at 4% is KES 360,000. For a rural plot bought for KES 1,500,000, duty at 2% is KES 30,000. Add the other costs listed in the costs of buying property to see the full price of the purchase.

Who pays and when

By custom the buyer pays stamp duty, unless the agreement says otherwise. It must be paid within a limited time of signing the transfer, and late payment attracts penalties. Your lawyer normally handles it as part of the conveyancing process and the payment is made on the KRA iTax system or the lands e-platform.

What you need to pay

  • The signed sale agreement and transfer
  • The valuation from the government valuer
  • The seller's and buyer's KRA PINs
  • A copy of the title or lease
  • Evidence of any consents, such as the Land Control Board for agricultural land

Stamp duty and capital gains

Stamp duty is not the same as capital gains tax, which the seller pays on any gain; see selling a property: the capital gains tax steps. Keep your stamp duty receipt: it forms part of your cost when you sell later, and it reduces the gain. The capital gains tax calculator includes it.

If you are buying to let

Stamp duty is a capital cost, not a deductible expense, but it counts toward the total you have invested. The rental property investment analyser adds buying costs to the price and shows the yield on the whole amount, and our guide on rental yield explains how to read it.

If you are importing or building

Other purchases carry different duties, for example imports; see how to calculate import duty on goods.

Keep the paperwork

Keep the stamped transfer, the payment receipt and the valuation with the title. The tax records checklist and document log has a place for each, and the records every landlord should keep lists the others.

Rates and procedures are set by the Stamp Duty Act and land office practice. Confirm the current position with your lawyer or the land registry.