As would be expected, there are several transactions involved in buying and selling property, which attract fees and taxes. In Kenya, you incur charges from the moment you begin searching for feasible investment ventures.
While some costs are set, such as registration and requisite search fees, many costs associated with buying and selling real estate in Kenya are highly variable and based on:
- The type of real estate
- Location of the property
- Commissions and fees charged and earned by the various professionals (which are also often based on type and location of the property)
- The type of transactions
- Documents you want or need
The estimated sum for round trip transactions can range from 4.5% to 6.8% of the selling/buying price of the real estate.
Real-estate Agent Fees
- Searching fees: rates vary depending on the type, size and cost of property with an urban apartment in upmarket neighborhood costing as much as Ksh5,000
- Viewing fees: varies among real estate agents but usually ranges between Ksh500- 1000 for residential houses and over Kshs5,000 for commercial properties
- Listing Fees: varies depending on size and location of property with landlords paying from 2% the value of the property
- Agent’s commission (buyer & seller): 1.25% of the sale price
Property Requisite Search Fees
- Preliminary requisite search fee: Ksh500
- Costs of obtaining requisite completion documents (seller): Kshs500
Registration Costs
- Registration fees: Ksh500
- Banker’s cheque fee: Kshs600
- Land rent clearance certificate: Kshs 7,500
Stamp Duties
Stamp duties are taxes tied to documents and real-estate sale/purchase transactions. It’s usually based on the sale price of the property.
- Duly signed sales agreement: Ksh200 for original copy and Kshs20 for each copy
- Property transfer (properties within municipalities): 4% flat rate
- Property transfer (outside municipalities): 2% flat rate
- Mortgage: 0.1% of the amount of mortgage
- Property leased for less than 3 years: 1% flat rate
- Property leased over a duration of 3yrs: 2% flat rate stamp duty
Taxes
- Income tax (non-residents): 30% of gross rental income
- Income tax (foreign companies): 37.50% flat rate
- Annual property tax: varies across locations and property value but is usually 1% of the property value
- Land tax: varies by location of the land and is most costly in major towns such as Nairobi with rates as high as 8%
Legal and Mortgage Fees
- Legal charges related with taking mortgage
- Depends on amount of mortgage you take (higher mortgages mean higher fees) but mostly the rates are between 0.5-1.5% of the value of property
- Property insurance: varies with duration of loan repayment 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 between 5 – 10% of the value of property
- Legal fees related with lawyer overseeing sale process: 1.5%
Other Important Costs
- Survey fees: Ksh 5, 000 consultation fee.
- Survey fees are determined by the survey work done
- Valuation charges: usually Kshs5,000 consultation fee
- However, the actual valuation fee depends on property value. For instance valuation charges for urban properties valued Ksh10 million means Ksh40,000
- Residency permit fees: accompanied by non-refundable processing fees and the fees vary depending with the type of permit you need. For instance:
- Class D- Kshs200,000 annually with 10,000 non-refundable fees
- Class I- Kshs5,000 with Kshs1,000 non-refundable fee
- Class A- Kshs250, 000 and 10,000 non- refundable, etc.
Company setup costs: depends on type and size of company and its location
Utility reconnection fees include
- Electricity deposit fees: standard Ksh2,500
- Water deposit fees: standard Ksh1,000