Current Stamp duty rates in Kenya

Current Stamp duty rates in Kenya

Stamp duty is a tax charged on several transactions such as stock, shares, or transfer of properties. Stamp duty rates in Kenya are determined by the Ministry of Lands, which carries out functions similar to those of the Kenya Revenue Authority (KRA). Stamp duty is vital, as it is one of the primary earners for the Kenyan Government.

Stamp duty rates in Kenya

Source: UGC

Out of all the significant transactions carried out, land contributes the most significant amount, and it includes rents for land and any other fees related to the property. Other relevant taxes applied on goods purchased by consumers include railway development levy, catering levy, excise duty, and import duty. When products are imported into the country, import duty is charged. The rates for import duty varies from 0% on raw materials to 25% on complete products.

Import duty is exempted on goods for the United Nation agencies, and Official Aid Funded projects. Some locally manufactured products and imported goods also attract excise duty.

Stamp duty rates in Kenya

Stamp duty is an amount of money imposed on leases, transfer of properties, and securities. However, the finance act exempted a stamp duty related to transfer of titles for Sukuk arrangements. Below are the rates for stamp duties according to the stamp duty act Kenya.

  • Transfer of immovable property in urban areas costs 4% while transfer in the rural areas will have a 2% rate.
  • When creating or increasing the share of the capital, the duty calculator Kenya charges a person 1%
  • When registering a company with a nominal share capital, the amount is 0%
  • According to stamp duty Kenya, when transferring marketable securities and unquoted shares one pays the rate of 1%
  • An exemption for stamp duty charges is put on the transfer of quoted shares, and marketable securities.
  • When participating in registration of mortgage or debenture, for collateral security, you will be charged 0.05%, while for extra protection it will amount to KSHs.20 per counterpart.
  • Individuals who want to carry out a lease will part with at least 1% for the annual rents for three years, while for a period over three years, they will part with 2% of the yearly rent.

KRA stamp duty forms

The Kenya Revenue Authority took over the collection of stamp duty 13 years ago. Below are some guidelines on how to handle the forms.

  • All forms are completed from the Ministry of Lands and Housing. The quadruplicate is received upon the presentation of documents, which attract a stamp duty.
  • The quadruplicate is handled by an agent, duty payer or advocate who takes it to either National Bank or Kenya Commercial Bank for payment.
  • Bank charges are minimal and bared by the person paying for the duty
  • The money for the duty and amount for the bank is paid through either a banker’s cheque or cash.
  • After payment, the original copy of the payment form is retained by the person paying for presentation
  • The distribution of the document is such that the quadruplicate, which is yellow in color, remains in the bank. The triplicate, which is green in color, is forwarded to the registrar of titles and lands for record keeping. The duplicate is blue in color and it is forwarded to the Commissioner of Domestic Taxes by the bank. Finally, the original white copy remains with the duty payer.

READ ALSO: Business Registration Kenya Guide 2017-2018

Stamp duty act in Kenya

Current Stamp duty rates in Kenya

Source: UGC

According to the stamp duty act Kenya pdf, anytime you purchase a property, it is mandatory to pay revenue to the Government. Therefore, one needs to determine the the stamp duty of the property they are purchasing. Having a lawyer during the process is good as they uphold integrity. At no point should one underestimate the given value to ensure the right amount is provided. Within 30 days of acquisition, all documents need to be stamped to avoid any penalties.

On the other hand, registered land acts and the land acts state that legal transactions involving mortgages, charges, transfers, and leases are not acceptable unless they have been duly charged. Revenue that is paid to the Commissioner of Domestic Taxes goes to the Government, hence failing to pay the amount is a criminal offense. As a citizen in this country, you need to know how to pay stamp duty Kenya.

Upon receiving them, documents which were executed abroad need to be stamped within 30 days. If the owner is not around, the handling the document on their behalf should be able to pay the revenue in a timely fashion and waive the penalties. If a case arises where the paid amount exceeds the expected amount, application to get a refund should be made within one year.

Stamping an official document is advantageous since it can be used in a court of law in case there is fraud. Amount of revenue being paid varies depending on the location and county where a person resides. For instance, agricultural land outside the county attracts around two percent of the price they are sold for, while properties within the counties attract a duty of four percent. All these steps are necessary for the PAYE calculator Kenya.

READ ALSO: How to file rental income tax in Kenya

The act for stamp duty in Kenya has made it clear that revenue for a mortgage is pegged on the secured amount. However, the legal land rates stand at two shillings for every KSHs. 1,000. Hence a mortgage going for KSHs five million attracts stamp duty of SHs 10,000. For leased property, the stamp duty is based on the payable rent every year. Presently, concluding land transactions within 24 hours is not possible. Each valuation is carried out before a collector endorses the property. It is how to calculate stamp duty in Kenya

When it comes to stamp duty rates in Kenya, the stamp duty collector is at liberty to ask to value land when issues of doubt arise.


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