Buying property in Kenya goes beyond agreeing on the purchase price. Many buyers—especially first-time and diaspora investors—are often surprised by additional costs such as stamp duty, legal fees, and taxes.
Understanding these costs upfront helps you budget accurately, avoid delays, and complete your transaction smoothly. This guide explains all the key statutory and legal costs involved when buying property in Kenya.
1. Stamp Duty in Kenya Explained
What Is Stamp Duty?
Stamp duty is a government tax paid to KRA when property ownership is transferred from the seller to the buyer. It is mandatory and must be paid before title registration.
Stamp Duty Rates in Kenya
- 4% of the property value for urban areas (e.g. Nairobi, Mombasa)
- 2% of the property value for rural areas
The value used is usually the higher of the purchase price or the government valuation.
Example:
If you buy an apartment in Nairobi for KES 10,000,000:
- Stamp Duty = 4% × 10,000,000 = KES 400,000
Stamp duty is one of the largest upfront costs in any property transaction.
2. Legal Fees for Property Buyers in Kenya
Advocate Fees
Buyers are required to engage an advocate to conduct:
- Due diligence
- Contract review
- Transfer registration
- Completion documentation
Legal fees are guided by the Advocates Remuneration Order.
Typical Legal Fees
- 1%–2% of the purchase price
- Subject to a minimum fee (often around KES 75,000–100,000)
- Plus 16% VAT on legal fees
What Legal Fees Cover
- Sale agreement drafting/review
- Title search and verification
- Transfer registration
- Liaising with lands office & KRA
3. Valuation Fees
Valuation is required for:
- Stamp duty assessment
- Mortgage financing (if applicable)
Typical Cost
- 0.25%–0.5% of property value
- Paid to a government-approved valuer
Banks may require a separate valuation for mortgage approval.
4. Land Registry & Registration Fees
These are administrative charges paid during title transfer:
- Title registration fees
- Transfer registration fees
- Consent to transfer (for leasehold properties)
Costs are relatively modest compared to stamp duty but are mandatory.
5. Taxes Property Buyers Should Know
Capital Gains Tax (CGT)
- Paid by the seller, not the buyer
- Charged at 15% of the net gain
- Important for buyers to confirm CGT compliance to avoid transfer delays
Value Added Tax (VAT)
- Residential property: Generally VAT-exempt
- Commercial property: VAT may apply
- Always confirm VAT status for off-plan or mixed-use developments
6. Mortgage-Related Costs (If Financing)
If you’re buying using a mortgage, expect additional costs:
- Mortgage arrangement fees
- Bank legal fees
- Mortgage valuation fees
- Mortgage registration fees
These costs vary by lender but should be factored into your budget.
7. Total Cost Breakdown Example (Nairobi Purchase)
For a KES 10M apartment in Nairobi, estimated additional costs:
- Stamp Duty (4%) → KES 400,000
- Legal Fees + VAT → KES 120,000–180,000
- Valuation Fees → KES 25,000–50,000
- Registration & Misc. → KES 20,000–40,000
Total Extra Costs: ~6%–8% of purchase price
8. Tips to Reduce Surprises When Buying Property in Kenya
✔ Always request a full cost breakdown before committing
✔ Work with a reputable real estate agent and advocate
✔ Confirm whether prices are inclusive or exclusive of stamp duty
✔ Budget for taxes early—especially if buying off-plan
✔ For diaspora buyers, appoint a Power of Attorney early
Final Thoughts
Stamp duty, legal fees, and taxes are unavoidable when buying property in Kenya—but they don’t have to be confusing.
With proper planning and expert guidance, you can avoid delays, control costs, and protect your investment from day one.
Thinking of Buying Property in Kenya?
Whether you’re buying cash, using a mortgage, or investing off-plan, understanding the true cost of ownership is critical.
Talk to a property expert today for a transparent cost breakdown and stress-free purchase process.
