Stamp Duty is a tax levied on legal instruments such as cheques, receipts, military commissions, marriage licenses, property and land transactions. It is a payable in different rates depending on the nature of the instrument.
On real property, stamp duty rates in registries located in rural areas are 2% while those on urban areas are 4% of the property value. it constitutes the biggest amount of money compared to other costs when purchasing property.
However, there are circumstances under which stamp duty applies; that is, when transferring a property toa charitable organization as a gift, or when transferring property among family members as an inheritance.
Stamp duty is among the last payment of a property transaction as it is payable upon all the conditions of the sales agreement are met by both parties. The government valuer determines the market value of the property which shall be used for the basis of calculating the stamp duty amount.
Stamp duty must be paid within 30 days of the property transaction. If you don’t pay on time, the transaction becomes invalid, and any agreements made are not legally binding. Additionally, there are penalties for late payment, so it’s crucial to adhere to the deadlines.
Payment of Stamp duty in Kenya is done through Kenya Revenue Authority (KRA)’s iTax portal.
