Purchasing of Properties in Kenya
There are two types of estate ownership of land in Kenya; freehold and leasehold.
Freehold
This is absolute ownership of land as besides municipal rates, no other taxes are levied. The municipal rates are determined by the unimproved site value of the land.
Leasehold
In most cases, the land is owned by the government or by individuals /companies who lease the land for say 99, 999, 9999 years to the purchaser. Under such conditions, the leaseholder will transfer the unexpired term of the lease to the purchaser who will then take over payment of the land rate and municipal rates which has to be paid before the transfers. The land rate is determined by the head lessor and depends on the locality and the property size. The municipal rate is determined by the City Council and locality of the plot.
Conditions of Sale
The purchaser pays 4% of the purchase price, which is a government tax known as stamp duty. He also pays legal fees to the lawyer acting for him as per lawyer’s scale.
A deposit of the purchase price is payable on signing of a sale agreement and the balance on completion of registration, depending on what the vendor and purchaser have agreed.
Consent
Where leasehold land and the agricultural land is concerned, consent to transfer the land has first to be sought and this is the responsibility of the vendor but in some cases, can be the other way round depending on the understanding between the vendor and the purchaser. No consent is required where freehold land is concerned. There is also a presidential decree to plots on the 1st row and 2nd row for the beach.
Important
It is imperative that the lawyer acting for the purchaser carries out a thorough search at the Lands Offices to ascertain that the land is free from all encumbrances before making any commitment.