Unsurprisingly, there are several transactions involved in buying and selling properties, attracting fees and taxes. In Kenya, you incur charges from the moment you start looking for feasible investment projects.
While some costs are set, such as registration and required search fees, many costs associated with buying and selling real estate in Kenya are highly variable and are based on:
-
The type of real estate
-
Property location
-
Commissions and fees charged and earned by the various professionals (which are often also based on the type and location of the property)
-
The type of transactions
-
Documents you want or need
The estimated sum for round trip transactions can range between 4.5% and 6.8% of the sale / purchase price of the property.
Real estate agent fees
-
Search Fees – Fees vary based on property type, size and cost with an urban apartment in a luxury neighborhood costing as much as Ksh5,000
-
Viewing Fees – Varies between real estate agents, but generally ranges from Ksh500- 1000 for residential homes to over Kshs5,000 for commercial properties
-
Listing Fees – Varies based on the size and location of the property and owners pay from 2% of the property value
-
Agent commission (buyer and seller): 1.25% of the sale price
Property Requirement Search Fees
-
Prerequisite search fee: Ksh500
-
Costs of Obtaining Necessary Completion Documents (Vendor): Kshs500
Registration costs
-
Registration fees: Ksh500
-
Bank check fee: Kshs600
-
Land rental authorization certificate: Kshs 7,500
Stamp duty
Stamp duty are taxes attached to real estate purchase / sale documents and transactions. It is usually based on the sale price of the property.
-
Sale agreement duly signed: Ksh200 for original copy and Kshs20 for each copy
-
Property transfer (properties within municipalities): 4% flat rate
-
Transfer of ownership (outside municipalities): 2% lump sum
-
Mortgage: 0.1% of the mortgage amount
-
Property leased for less than 3 years: 1% flat rate
-
Property leased for a duration of 3 years: 2% fixed stamp tax
Taxes
-
Income tax (non-residents): 30% of gross rental income
-
Income tax (foreign companies): 37.50% lump sum
-
Annual Property Tax – Varies based on location and property value, but is generally 1% of property value
-
Land tax: varies depending on the location of the land and is more expensive in major cities such as Nairobi with rates of up to 8%.
Legal and mortgage fees
- Mortgage-related legal fees
- It depends on the amount of mortgage you take (higher mortgages mean higher rates), but most of the time the rates are between 0.5% and 1.5% of the property’s value.
- Property insurance – varies by loan repayment duration and lender
- Mortgage life policy: charged at 0.3% and 0.6% of the mortgage loan per year
- Mortgage Negotiation Fees – Although it varies, most lenders ask for 1% of the mortgage amount
- Mortgage Indemnity Insurance – Often ranges from 5-10% of the property’s value.
- Legal fees related to the attorney supervising the sale process: 1.5%
Other important costs
- Survey Fees: Ksh 5,000 consultation fee.
- Survey fees are determined by survey work performed
- Valuation charges: usually Kshs5,000 consultation fee
- However, the actual appraisal rate depends on the value of the property. For example, urban property valuation charges valued at Ksh10 million means Ksh40,000
- Residence Permit Fees – Accompanied by non-refundable processing fees and fees vary depending on the type of permit you need. For instance:
-
Class D- Kshs200,000 annually with 10,000 non-refundable fees
-
Class I- Ksh5,000 with non-refundable fee of Kshs1,000
-
Class A- Kshs250, 000 and 10,000 non-refundable, etc.
Company setup costs: Depends on the type and size of the business and its location.
Utility reconnection fees include
-
Electricity Deposit Rates: Standard Ksh2,500
-
Water tank fees: standard Ksh1,000
