KRA Stamp Duty Calculator (Kenya)
Stamp Duty Calculation
How It's Calculated
Property Transfer
Stamp duty on property transfers is calculated as a percentage of the property's value. The rate is 4% for properties within municipalities (urban areas) and 2% for properties outside municipalities (rural areas).
Stamp Duty FAQ
What is Stamp Duty and why is it paid?
Stamp Duty is a tax levied on legal documents, known as "instruments". It is paid to make these documents legally valid and admissible in court. Common examples include property sale agreements, lease agreements, and mortgage documents.
What is the Stamp Duty rate for buying property in Kenya?
The rate depends on the property's location. It is 4% of the property's value for land or buildings located within a municipality (urban area) and 2% for properties located outside municipalities (rural areas).
How do I know if my property is in an urban/municipal area?
Generally, properties within the boundaries of major cities (Nairobi, Mombasa, Kisumu) and gazetted municipalities fall under the 4% rate. If you are unsure, your lawyer or a registered valuer can confirm the official designation of the area.
How is Stamp Duty for a lease agreement calculated?
The rate depends on the lease term. For leases under 1 year, it's 0.5% of the total annual rent. For leases between 1-3 years, it's 1% of the total rent for the period. For leases over 3 years, it's 2% of the total rent for the period. Our calculator handles this logic automatically.
Who is responsible for paying Stamp Duty?
The responsibility for paying Stamp Duty typically falls on the person acquiring the asset or right. For a property sale, it's the buyer. For a lease, it's the tenant. For a mortgage, it's the borrower.
When is Stamp Duty supposed to be paid?
Stamp Duty must be paid within 30 days of the execution of the legal instrument (the date the document is signed). Late payment attracts significant penalties.
What are the penalties for late payment of Stamp Duty?
The penalty for late payment is a fine equal to the principal amount of the unpaid duty, effectively doubling the tax due. It is crucial to pay on time to avoid this.
Are there any transactions that are exempt from Stamp Duty?
Yes, some exemptions exist. These include transfers of property between spouses, transfers to charitable organizations, and certain transactions related to corporate restructuring, subject to approval from the Treasury.
What is the process for getting a document stamped?
The process involves lodging the document with the Collector of Stamp Duties, who assesses the duty payable. Once assessed, you generate a payment slip and pay the duty. After payment, the document is embossed with a stamp to show that the duty has been paid.
Does Stamp Duty apply to inheritances or gifts?
Stamp duty is generally not payable on the transmission of property to heirs under a will or on intestacy. However, a transfer of property as a gift between individuals who are not spouses is typically subject to stamp duty based on the value of the property.