If you intend to buy land, prepare yourself for a significant increase in stamp duty tax on land transactions within urban areas, as the Ministry of Lands, Housing, and Urban Development enforces a directive to double the stamp duty rate from 2 per cent to 4 per cent.
In an internal memo circulated to all land registrars across the nation, Lands Permanent Secretary Nixon Korir instructed the immediate implementation of the stamp duty tax directive, warning of severe consequences for non-compliance.
"Any officer found not to have complied with this directive shall be held personally liable and be surcharged to the extent of the lost revenue," Korir stated in the memo.
The affected areas span 83 municipalities, including Nakuru and Kisumu cities, as well as other urban centers such as Naivasha, Gilgil, Thika, and Eldoret.
"This is, therefore, to direct that going forward, Stamp Duty on Transfer of land within the Gazetted Towns and Municipalities shall be charged at 4 per cent in line with the Stamp Duty Act," Korir reiterated.
Stamp duty is a tax imposed by the government on legal documents, particularly in property and asset transfers.
In Kenya, purchasers are required to pay this fee to the government based on the property's current value, with rates varying depending on the location.
Notable municipalities affected include Naivasha, Gilgil, Thika, Eldoret, Juja, Githurai, Nanyuki, Murang’a, and Kiambu.
Among others are Molo, Ruiru, Kikuyu, Karuri, Limuru, Gatundu, Lari, Kabete, Kisumu, Ahero-Awasi, Maseno, Muhoroni, and Kombewa-Bodi.
Additionally, areas such as Isiolo, Kwale, Diani, Lungalunga, Kinango, Rumuruti, Busia, Malaba, Migori, Rongo, Awendo, Bungoma, Kimilili, Narok, Kilgoris, Embu, Kathwana, Chuka, Kericho, Litein, Mwatate, Voi, Taveta, Homa Bay, Oyugis, Mbita, Kendu Bay, Ndhiwa, and Kenol are included in the revised classification.
The responsibility for collecting stamp duty has shifted from the Kenya Revenue Authority (KRA) to the Ministry of Lands, a move initiated in November 2023.
This change aims to streamline the payment process and centralize revenue collection.
"In order to make the payment of stamp duty for land transactions a seamless process, the Kenya Revenue Authority has now made it possible for the public to make payments at the State Department for Lands and Physical Planning," a joint public notice by KRA and the Lands Ministry stated.
Effective November 27, 2023, all stamp duty payments for land transactions will be made through the e-Citizen platform using the designated pay bill number 222222. The notice also highlighted additional payment instructions available on the Ardhisasa platform.
This shift in revenue collection aligns with the government's broader strategy to consolidate all revenue streams under a single pay bill, streamlining administrative processes and enhancing accountability.
The decision to double stamp duty tax rates in urban areas and municipalities comes amid increasing taxes across the board.
