Purchasing of Properties in Kenya

There are two types of estate ownership of land in Kenya; freehold and leasehold.

Freehold

This is absolute ownership of land as besides municipal rates, no other taxes are levied. The municipal rates are determined by the unimproved site value of the land.

Leasehold

In most cases, the land is owned by the government or by individuals /companies who lease the land for say 99, 999, 9999 years to the purchaser. Under such conditions, the leaseholder will transfer the unexpired term of the lease to the purchaser who will then take over payment of the land rent and municipal rates which has to be paid before the transfers. The land rent is determined by the head lessor and depends on the locality and the property size. The municipal rate is determine by the City Council and locality of the plot.

Conditions of Sale

The purchaser pays 4% of the purchase price, which is a government tax known as stamp duty. He also pays legal fees to the lawyer acting for him as per lawyer’s scale.

10% of the purchase price is payable on signing of a sale agreement and balance within say, 30, 60 or even 90 days, depending on what the vendor and purchaser have agreed.

Consent

Where leasehold land and the agricultural land is concerned, consent to transfer the land has first to be sought and this is the responsibility of the vendor but in some cases, can be the other way round depending on the understanding between the vendor and the purchaser. No consent is required where freehold land is concerned. There is also a presidential decree to plots on the 1st row and 2nd row for the beach.

Important

It is imperative that the lawyer acting for the purchaser carries out a thorough search at the Lands Offices to ascertain that the land is free from all encumbrances before making any commitment. And it’s always advisable to appoint a land surveyor to ascertain the beacons of the plot and to ensure that the property that you are about to purchase hasn’t been set aside for public utility.