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Land Rights in Kenya: Land Rates and Taxes.

  in 2015 having been suspended in 1985. CGT is charged at the rate of 5% of the gain. There are various exemptions on CGT provided under the ITA. The tax on rental income is a tax arising from the gains and profits for occupation of property. The ITA provides for various ways of taxing rental income; Where the rent is payable to a non-resident, the tenant is required to withhold 30% of the rent and remit it to the Kenya Revenue Authority. The tax withheld is a final tax. Where the rent is payable to a resident, if the property is commercial, the tenant being an appointed agent, is required to withhold 10 % of the rent. The tax withheld is not a final tax and the landlord is required to file their income tax in the usual way. Where the rent is payable to a resident and the property is residential, the landlord may opt to either pay a monthly rental income tax, computed at 10 % of the gross rent a (final tax) or pay the instalment tax and final income tax in the usual way. Stamp dut...
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Land Rights in Kenya: Land Rates and Taxes.

 in 2015 having been suspended in 1985. CGT is charged at the rate of 5% of the gain. There are various exemptions on CGT provided under the ITA.

The tax on rental income is a tax arising from the gains and profits for occupation of property. The ITA provides for various ways of taxing rental income;

  • Where the rent is payable to a non-resident, the tenant is required to withhold 30% of the rent and remit it to the Kenya Revenue Authority. The tax withheld is a final tax.
  • Where the rent is payable to a resident, if the property is commercial, the tenant being an appointed agent, is required to withhold 10 % of the rent. The tax withheld is not a final tax and the landlord is required to file their income tax in the usual way.
  • Where the rent is payable to a resident and the property is residential, the landlord may opt to either pay a monthly rental income tax, computed at 10 % of the gross rent a (final tax) or pay the instalment tax and final income tax in the usual way.

Stamp duty- Stamp duty, provided for under the Stamp Duty Act, Cap 480, is a tax payable on various instruments. Stamp duty is charged on instruments relating to land such as transfers, charges and leases on land. The rate of stamp duty is based on the instruments, the user of the property and the time of payment among others. There are various exemptions to payment of stamp duty granted under the Stamp Duty Act.

Value Added Tax (VAT) – Under that Value Added Tax Act, VAT is payable on the sale of commercial land. Last year (in 2018) however the High Court ruled that VAT is not payable on the sale or purchase of land, irrespective of whether or not the buildings standing on it are residential or commercial.

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