Stamp duty is one of the largest transaction costs to budget for when buying land or property in Kenya.

For an ordinary transfer of immovable property, the rate is 4% if the property is within a municipality and 2% if it is outside a municipality. The buyer ordinarily bears the cost.

Importantly, stamp duty is not necessarily calculated on the price written in your sale agreement. The property is valued for stamp duty purposes, and if the government valuation is higher than the purchase price, additional duty is payable on that higher value under section 10A of the Stamp Duty Act.

On a KES 12 million property in Nairobi, for example, stamp duty alone is KES 480,000. That is more than twice the basic advocate’s scale fee for the purchase.

This guide explains the applicable rates, valuation, worked examples, payment process, exemptions and some of the mistakes buyers should avoid.

Stamp duty rates in Kenya at a glance

The important factor is location, not whether the land is residential, commercial or agricultural.

The High Court recently confirmed that neither land use nor tenure determines whether the 4% or 2% rate applies. The relevant factor is whether the property is within or outside a municipality.

Is there a 6% stamp duty rate for commercial property?

No, not for an ordinary transfer of immovable property merely because it is commercial.

Some online sources refer to a 6% commercial-property rate, but the ordinary rates applicable to transfers of immovable property remain 4% for urban or municipal property and 2% for property outside a municipality. Current tax guidance reflects the same rates.

The Finance Act, 2026 did not increase these rates. Its main stamp-duty change affecting real estate concerned relief for qualifying transfers into Real Estate Investment Trusts.

Who pays stamp duty when buying land?

Ordinarily, the buyer or transferee is responsible for stamp duty on the transfer.

The seller may separately be liable for capital gains tax on any taxable gain from the disposal, subject to the exemptions that apply under the Income Tax Act.

The sale agreement may allocate transaction costs between the parties, but that contractual arrangement does not remove the need for the transfer instrument to be properly stamped before registration.

Under section 46 of the Land Registration Act, an instrument that is required to be stamped cannot be accepted for registration until it has been stamped in accordance with the Stamp Duty Act.

What value is stamp duty charged on?

This is where buyers frequently underestimate their costs.

Stamp duty is not necessarily limited to the purchase price agreed between the buyer and seller.

Section 10A of the Stamp Duty Act provides for a conveyance or transfer of immovable property to be referred for determination of its open-market value for the purpose of establishing whether additional stamp duty is payable.

For example, suppose you agree to buy a house for KES 8 million.

If the government valuation places its value at KES 10 million, a property attracting the 4% rate could result in stamp duty of:

KES 10,000,000 × 4% = KES 400,000

not the KES 320,000 you may initially have budgeted using the purchase price.

Can you simply put a lower price in the agreement?

No.

Section 10 of the Stamp Duty Act requires all facts and circumstances affecting liability for stamp duty or the amount payable to be fully and truly stated in the instrument.

A person who negligently or deliberately fails to disclose those facts may commit an offence punishable by a fine of up to KES 100,000.

More practically, understating the purchase price does not prevent the property from being independently valued for stamp-duty purposes.

Worked examples

The examples below assume the advocate handling the purchase is VAT registered, and therefore VAT at 16% applies to the advocate’s professional fee.

The legal fees are calculated using the conveyancing scale under the Advocates (Remuneration) Order. Under the applicable scale, the first KES 5 million attracts 2%, with the balance between KES 5 million and KES 100 million attracting 1.5%.

1. A KES 12 million property in Nairobi

Assuming the government valuation does not exceed KES 12 million:

• Stamp duty at 4%: KES 480,000
• Advocate’s scale fee: KES 205,000
• VAT on the advocate’s fee at 16%: KES 32,800
• Total: KES 717,800

That is approximately 6% of the purchase price, before other disbursements.

2. A KES 3 million property outside a municipality

Assuming the government valuation does not exceed KES 3 million:

• Stamp duty at 2%: KES 60,000
• Advocate’s scale fee: KES 60,000
• VAT on the advocate’s fee: KES 9,600
• Total: KES 129,600

That is approximately 4.3% of the purchase price.

3. When the valuation is higher

Suppose you agree to buy a property for KES 8 million but the government valuer assesses it at KES 10 million.

If the 4% rate applies:

KES 10,000,000 × 4% = KES 400,000

A buyer who had budgeted only KES 320,000 for stamp duty would suddenly need another KES 80,000.

This is why the agreed purchase price should not be treated as the final stamp-duty figure until valuation is complete.

How stamp duty is assessed and paid

1. Execute the transfer

After the relevant completion conditions are satisfied, the parties execute the transfer instrument.

2. Lodge the property for valuation

The required documents are submitted for stamp-duty valuation.

The State Department for Lands currently lists valuation for stamp-duty purposes as a free government service. Its published service standard is eight days.

In practice, however, buyers should allow more time.

From our experience with transactions in Nairobi, two to three weeks is a realistic working estimate. A straightforward transaction can sometimes be valued in about one week, but everything generally has to go smoothly for that to happen.

This makes it important to build some flexibility into the completion timetable.

3. Obtain the assessment and pay the duty

For transactions being processed through Ardhisasa, stamp duty can be handled through the ArdhiPay Stamp Duty Self Assessment function. The platform generates an invoice that can then be paid through the available payment methods.

The National Stamp Duty Module is also being progressively rolled out to additional counties as part of Ardhisasa.

For transactions involving registries or processes that have not fully migrated to that workflow, follow the payment instructions generated for the particular transaction. KRA continues to publish an iTax stamp-duty payment route, so buyers should not assume that every registry currently follows an identical digital process.

4. Register the transfer

Once stamp duty and the other completion requirements have been satisfied, the transfer can be presented for registration.

The State Department for Lands currently lists the ordinary land-transfer registration charge as KES 1,000, with a KES 2,500 title fee where applicable, in addition to the stamp duty payable.

When must stamp duty be paid?

Section 6 of the Stamp Duty Act provides that an instrument should generally be stamped within 30 days after it is first executed, or within 30 days after it is first received in Kenya if it was executed abroad.

Where the Collector’s formal opinion on the duty payable has been requested under section 17, the instrument is to be stamped within 21 days after notice of the assessment.

Do not therefore treat stamp duty as something that can simply be left until much later in the transaction.

What happens if stamp duty is paid late?

Late stamping does not necessarily mean the document can never be used.

The Stamp Duty Act contains mechanisms for an instrument to be stamped out of time. Under section 20, the Collector may allow late stamping where the statutory conditions are met.

The ordinary penalty under that provision is 5% of the outstanding duty for each three-month period or part of it, subject to a maximum of 100% of the principal duty and the statutory powers to remit penalties.

An unstamped instrument may also encounter problems with registration and admissibility until the defect is dealt with.

The better approach is therefore simple: assess and deal with stamp duty promptly.

Stamp duty exemptions in Kenya

Not every transfer attracts the ordinary 4% or 2% duty.

Several exemptions can be important in estate planning, family arrangements and investment transactions.

Transfers between spouses

A conveyance or transfer of real property between husband and wife attracts nil stamp duty under the Schedule to the Stamp Duty Act. KRA also currently lists transfers between spouses among stamp-duty exemptions.

Registered family trusts

The Finance Act, 2021 amended section 52 of the Stamp Duty Act to extend the exemption for voluntary dispositions to a registered family trust. It also amended section 117 to include registered family trusts among exempt instruments.

Section 52(6) also excludes transfers made by a trustee or other fiduciary to a beneficiary from the gift-duty provisions of section 52.

This is one reason family trusts can be useful estate-planning vehicles.

However, the transaction still needs to be properly structured and the exemption properly claimed. Describing a transaction as a “family transfer” is not enough by itself.

Family companies

KRA continues to recognise the exemption under Legal Notice No. 92 of 2007 for qualifying transfers of family property to a company wholly owned by the same family.

Affordable housing

Section 117 exempts the purchase of a house by a first-time homeowner under an affordable housing scheme.

There is also a separate exemption relating to transfers of houses constructed under an affordable housing scheme from a developer to the National Housing Corporation.

The exemption should therefore not be described as a blanket exemption covering every sale or resale of an affordable-housing unit.

Real Estate Investment Trusts

The Finance Act, 2026 expanded stamp-duty relief for qualifying transfers involving REITs.

KRA’s current Finance Act 2026 guidance confirms the exemption from stamp duty for REIT transfers.

What about a parent giving land directly to a child?

A transfer does not become stamp-duty free simply because the parties are relatives.

Section 52 generally treats a voluntary disposition or gift during the transferor’s lifetime as though it were a conveyance on sale, using the value of the property instead of a purchase price, unless a specific exemption applies.

That is why structures such as registered family trusts, qualifying family companies, spousal transfers and succession should not be confused with an ordinary gift of land to a relative.

What other costs should a buyer budget for?

Stamp duty is only part of the transaction cost.

A purchaser may also need to budget for:

• Advocate’s fees, calculated under the Advocates Remuneration Order, plus VAT where the advocate is VAT registered.
• Official search: currently KES 1,000 according to the State Department for Lands.
• Transfer registration: currently KES 1,000, plus a KES 2,500 title fee where applicable.
• Land Control Board consent: currently KES 3,000 for an ordinary application and KES 10,000 for special consent.
• Rates, rent and other clearance requirements, depending on the property.
• Financing costs, where a lender is involved, including the lender’s valuation, charge registration and legal fees.

Government charges can change, so these figures should be checked at the time of the transaction.

Land Control Board consent

Land Control Board consent is not required simply because a property is outside Nairobi.

It applies to controlled transactions involving agricultural land within a land control area.

Section 6 of the Land Control Act covers transactions such as a sale, transfer, lease, mortgage, exchange or partition of agricultural land in a land control area. A transaction requiring consent may be rendered void if the necessary consent is not obtained. The Court of Appeal reaffirmed the importance of this requirement in 2026.

Common mistakes buyers make

1. Not budgeting for stamp duty at all

This remains one of the most common issues we see in practice.

A buyer concentrates on raising the purchase price, advocate’s fees and perhaps financing costs, then discovers near completion that several hundred thousand shillings in stamp duty is still required.

For a KES 12 million Nairobi property, that is another KES 480,000 if the property is assessed at the purchase price.

Stamp duty should therefore form part of the purchase budget from the beginning.

2. Assuming stamp duty will be based on the agreed price

This is probably the second most common misunderstanding.

The price agreed between a willing buyer and seller does not necessarily determine the value accepted for stamp-duty purposes.

A government valuation can result in a higher assessment.

A prudent buyer should therefore keep a margin above the duty calculated purely from the purchase price.

3. Being asked to pay an estimated stamp-duty amount before valuation is complete

We have encountered transactions where a purchaser was requested to provide stamp-duty funds even though the valuation had not yet been completed.

There is an important distinction between setting aside money for stamp duty and treating an estimated amount as the final assessed duty.

Where valuation is still outstanding, the purchaser should understand whether the requested amount is simply being held on account pending assessment and whether a further top-up may be required.

The safest budgeting assumption is that the final duty is not known until the valuation and assessment process is complete.

4. Assuming every family transfer is exempt

A gift to a child, sibling or other relative is not automatically exempt merely because no money changes hands.

The particular exemption relied upon must actually apply.

5. Failing to keep enough cash available for completion costs

A transaction can reach the final stages while the buyer’s money is tied up in the purchase price.

The buyer should ordinarily keep stamp duty, legal fees and the expected registration and completion costs separate from the amount required to pay the seller.

Frequently asked questions

Is stamp duty 4% everywhere in Nairobi?

For ordinary transfers of immovable property within Nairobi City, the 4% municipal rate applies.

Is commercial property charged at 6%?

No. There is no separate ordinary 6% conveyance rate merely because a property is commercial.

The usual 4% or 2% rule applies according to location.

Do I pay stamp duty when I inherit land?

Ordinarily, the normal 4% or 2% transfer duty does not apply to the transmission of property to a beneficiary in the course of administration of a deceased person’s estate.

KRA currently identifies transfers of family property following the death of the registered owner as transactions that may benefit from stamp-duty exemption.

A later sale of that inherited property to someone else is a separate transaction and should be considered independently.

Can I pay stamp duty in instalments?

For an ordinary transfer, the duty required for stamping must be dealt with before the instrument can proceed to registration.

Ardhisasa instructs applicants to pay the invoice generated for the stamp-duty application.

Buyers should therefore budget on the basis that the assessed duty will need to be available in full rather than relying on an instalment arrangement.

I am buying property in Kenya while living abroad. Does the rate change?

No.

The 4% or 2% rate is determined by the property and transaction, not by where the buyer lives.

A buyer abroad may, where appropriate, appoint another person through a properly executed power of attorney to act on their behalf.

A land-related power of attorney must itself satisfy the relevant execution, stamping and registration requirements. The State Department for Lands currently lists registration of a power of attorney at KES 1,000, with stamp duty applicable to the instrument.

The practical rule

When budgeting for a land or property purchase in Kenya, do not budget only for the purchase price.

Before committing yourself, calculate:

Purchase price + estimated stamp duty + advocate’s fees + VAT where applicable + registry costs + any financing or consent costs.

Then leave some additional room for the possibility that the government valuation is higher than the agreed purchase price.

That relatively simple step can prevent a transaction from reaching completion only for the buyer to discover that they cannot immediately fund the transfer.

This guide provides general information on Kenyan law and practice as at 18 September 2026. It is not legal advice on a particular transaction. Rates, exemptions and administrative procedures can change, and the circumstances of individual transactions differ. Obtain advice on the specific property before signing or paying.