Capital Gains Tax, or CGT, is charged on the profit made when property, land or unquoted shares change hands in Kenya, and it is administered under the framework that the Kenya Revenue Authority sets out for CGT. It is a tax on the gain, not on the sale price; if a property is sold at a loss, no CGT arises. The seller, referred to as the transferor, carries the obligation to declare and pay it, not the buyer.

The current rate

CGT in Kenya is charged at 15% of the net gain on a property transfer. It is a final tax, meaning once it is paid, that gain is not taxed again elsewhere. The net gain is the transfer value, less incidental costs of the transfer, less the adjusted cost of the property, being acquisition cost, incidental acquisition costs, and any enhancement or improvement costs.

 A worked example

Take a seller who bought a plot in 2019 and is transferring it now. The numbers below show how the net gain and the tax on it are actually arrived at.

What counts as a deductible cost

The gain is calculated after allowable expenses are subtracted, so keeping records of these from the day of purchase pays off at the point of sale:

• The original acquisition or construction of the property
• Loan or mortgage interest tied to acquiring the property
• Legal fees on both the purchase and the sale
• Valuation costs
• Costs of advertising the property to find a buyer
• The cost of enhancements or improvements made to the property

When a sale is exempt

Not every transfer attracts CGT. The exemption sellers ask about most often is the private residence exemption: a property is exempt if the owner has occupied it continuously for the three years immediately before the transfer. Other exemptions cover transfers between spouses, transfers to immediate family, transfers as part of a divorce settlement, and transfers by a personal representative to a beneficiary in the course of administering a deceased person’s estate.

How and when it gets paid

CGT is declared and paid through iTax, and it falls due at whichever comes first: the seller receiving the full purchase price, or the transfer instrument being registered in the buyer’s favour. In practice, this means the tax is settled as part of closing, not afterward, and a completed transfer is not registered until it is.

Why this matters before a sale is priced

Sellers who treat CGT as a closing-day formality often discover the acquisition cost and improvement record they need are incomplete. Establishing the adjusted cost base early and confirming whether an exemption applies changes what a sale actually nets, and it changes it before an asking price is set rather than after an offer is accepted.

Stamp duty is a tax charged on the legal instrument that transfers property from seller to buyer, collected by the Kenya Revenue Authority under Section 2 of the Stamp Duty Act, Cap 480. It isn’t optional, and it isn’t negotiable between buyer and seller; it’s a statutory charge, and the transfer document itself has no legal force until it’s paid.

How Much It Actually Costs- and a 2024 Change Worth Knowing

The standard rate is 4 percent of the property’s value for land classified as urban, and 2 percent for land classified as rural or agricultural. Where this gets less straightforward is that the boundary between “urban” and rural” has shifted: a directive from the Principal Secretary for Lands in April 2024 formally reclassified a long list of gazetted towns and municipalities, including areas in Kiambu, Ruiru, and Thika previously treated as rural, to the 4 percent urban rate. A buyer who assumes a peri-urban plot still qualifies for the lower rural rate, based on how the area was classified a few years ago, can end up budgeting for half of what they actually owe. Confirming current classification with the relevant land registry, rather than assuming based on how a location “feels”, is worth doing before finalizing a budget.

What the Rate Is Actually Calculated On

Stamp duty is not calculated on the price in the sale agreement. It is calculated on the property’s determined market value, which is why the process always involves a government valuation step before the final figure is known. If the government valuer’s assessed figure comes in higher than the agreed purchase price, stamp duty is charged on the higher figure, not the lower one a buyer negotiated. This is a common source of budgeting surprise: a buyer who negotiates a good price on paper can still owe stamp duty calculated against a materially higher official valuation.

The valuation itself isn’t something a buyer commissions privately and submits. It’s carried out, or verified, by the Chief Government Valuer or a valuer they’ve designated, specifically to establish the property’s true open market value for stamp duty purposes, separately from any valuation a bank might have ordered for mortgage approval, and separately from whatever figure a selling agent quoted during marketing. A buyer relying on a bank’s mortgage valuation or an agent’s asking price as a stand-in for the government figure can end up with a materially wrong budget, since these three numbers frequently diverge.

Stamp Duty Isn’t the Only Closing - Just the Biggest One

It’s easy to treat stamp duty as the whole story of what a transfer costs beyond the purchase price, but it’s really the largest line item in a longer list. Legal fees for the conveyancing advocate, land registry and registration charges, the cost of the government valuation itself, and in some cases survey fees all sit alongside stamp duty as separate, additional costs. None of these are optional extras a buyer can skip by using a different process; a property transfer in Kenya legally requires a licensed advocate to prepare and register the documents, so budgeting for stamp duty in isolation, without the costs that travel alongside it, still leaves a buyer short at completion.

Who Pays It, and When

The buyer pays. This is standard practice in Kenyan property transactions, and it isn’t something a sale agreement typically reassigns. Once the transfer instrument is assessed, payment is due within 30 days of assessment for locally prepared instruments, or within 30 days of receipt for documents executed abroad. That window is shorter than it sounds once conveyancing, valuation scheduling, and fund transfers are factored in, which is exactly why the money needs to be set aside before the transaction reaches this stage, not scrambled for once the assessment lands.

What Happens If You Don’t Pay

This isn’t a fee a buyer can quietly skip or defer indefinitely. An unstamped transfer instrument is legally invalid, and any agreement signed between the parties becomes null and void and is inadmissible in court as evidence until the duty is paid. Missing the payment window doesn’t just delay the paperwork; it attracts a penalty of 5 percent of the assessed duty for every quarter it remains unpaid, which compounds quickly on a six- or seven-figure transaction. The property simply cannot be legally registered in the buyer’s name without this step being completed.

How to Actually Pay It

Payment is made through KRA’s iTax platform rather than at a bank counter or land registry desk. A buyer or their advocate logs into iTax, registers the payment under the Agency Revenue tax head with Stamp Duty as the sub-head, fills in the transfer and valuation details, and generates a payment slip that can be settled via bank transfer or M-Pesa. This is generally handled by the conveyancing advocate as part of the transfer process rather than something a buyer does entirely alone, but knowing the mechanics helps a buyer follow along and confirm the payment has actually cleared before assuming the transfer is complete.

The Exemptions, and Why Most Buyers Won’t Qualify

A handful of exemptions exist, but they’re narrower than buyers sometimes assume. The recognized categories are transfers of property between spouses, transfers of family property to surviving members on the death of the person in whose name it was registered, and gifts of land to registered charitable organizations. There is no general first-time buyer exemption in Kenya’s standard property market; a first apartment purchase through an ordinary sale agreement attracts stamp duty at the full standard rate, the same as any other buyer. Exemptions also aren’t automatic even where a buyer genuinely qualifies; they require an application and approval before payment, not a claim made after the fact.

How to Budget for It, Concretely

·       Estimate on the higher end: use the government valuation as your working assumption, not the price you negotiated, since the two can diverge

·       Confirm the classification of the specified location before assuming the rural rate applies, particularly in fast-growing peri-urban areas in Nairobi

•     Treat stamp duty as separate from, and in addition to, legal fees, land registry charges, and valuation costs; total closing costs on top of the purchase price typically land well above stamp duty alone.
•       Have the funds available and liquid before the transfer instrument is assessed, given the 30-day payment window
•      Ask your advocate to confirm the exact classification and expected rate in writing early in the transaction, not at the point of assessment 

In Summary

Stamp duty isn’t a fee that can be negotiated away or quietly avoided; it’s a statutory cost that determines whether a property transfer is even legally valid. Budgeting for 4 percent of a property’s likely government valuation, rather than 4 percent of the negotiated price, confirming the area’s current classification before assuming a rate, and setting stamp duty within the wider basket of closing costs rather than treating it as the only add-on are the adjustments that keep this cost from becoming a last-minute scramble.

The National Construction Authority is the statutory body established to regulate and streamline Kenya’s construction industry, with its core registration powers anchored in law: a person may not carry on the business of a contractor in Kenya unless registered by the Authority’s Board and holding a valid practicing license, under Section 15 of the National Construction Authority Act. In practice, this means the Authority sits upstream of almost every construction project in the country, residential, commercial, or public, licensing the contractors who build them, setting the standard they must build to, and inspecting sites to check that those standards are being met while work is underway.

The Authority also funds much of this regulatory work through a construction levy written into the same Act: a levy of up to 0.5 percent of contract value applies to construction projects worth more than five million shillings, with the proceeds directed toward the Authority’s inspection, training, and enforcement activities. For a buyer, the detail worth knowing is simply that a development of any meaningful size sits inside a system with its own dedicated funding for compliance checking, which is a large part of why registration status and inspection records are worth asking about rather than assuming.

Why Every Contractor Needs NCA Registration, and What the Categories Mean

Registration is not a formality a contractor can skip for a smaller job. It is the legal precondition for operating at all, and it comes with a category system that matters more to a buyer than it might first appear.

Contractors are classified from NCA1 down to NCA8 according to their technical capacity, financial strength, and track record, with each category capped at a maximum contract value they are permitted to handle. At the top, an NCA1 building contractor faces no upper limit on contract value, while an NCA8 contractor is capped at roughly KSH 10 million, according to the value-limit schedule published on the government’s official investment procedures portal. The categories in between scale down accordingly, and the classification applies separately across building works, specialist works, and roads and civil works, so a contractor’s strength on one class does not automatically carry over to another. The system exists precisely so that a contractor’s registered capacity can be checked against the scale of the project they are building, which means a multi-storey apartment block being handled by a contractor registered for small-scale work only is not a technicality. It is a direct signal that the project may be outside that contractor’s demonstrated capability.

What Happens When a Developer Skips Registration

Working without valid NCA registration is not a grey area under the Act; it is a legal condition for operating as a contractor at all, which means an unregistered contractor is already outside the law before the first wall goes up. In practice, this exposes a project to real consequences: a site can be marked non-compliant and issued a notice of suspension of works, halting construction until the issue is resolved; the contractor risks losing eligibility for future government and large private contracts, since NCA registration is a standard prerequisite for tendering; and the project owner, not just the contractor, carries the practical fallout of delays, rework, or disputes that follow from work that was never properly licensed or inspected in the first place. None of that is compensation a buyer can easily recover after the fact, which is exactly why it is worth checking before a deposit changes hands rather than after.

What NCA Site Inspections Actually Check

Registration is the entry condition; inspection is how the Authority checks that a specific project keeps meeting it once construction is underway. Project  owners are required to register their projects with the Authority and maintain compliance throughout construction, with site visits carried out under the National Construction Authority Regulations of 2014 to verify that a site is being run to standard. A compliant site is issued a site compliance certificate; a non-compliant one can be marked for suspension of works until the issues are corrected. For a buyer, this is the mechanism that theoretically stands between “the developer says the site is compliant” and an independent regulator actually having checked.

Why This Matters Even More for Off-Plan Buyers

A buyer purchasing a completed unit can at least walk through it before signing. An off-plan buyer is paying against a set of drawings and construction timeline, with no finished product to inspect until well after money has changed hands. For that buyer, NCA registration status and site compliance records are not a nice-to-have; they are close to the only independent, checkable signal available during the months or years when the building is still just a hole in the ground and a set of renders. Asking for a contractor’s NCA category and a project’s compliance status before paying a deposit is, in effect, the off-plan buyer’s version of a site visit.

The National Building Code: The Floor Beneath Every Specification

Beyond registering contractors and inspecting sites, the Authority also sets the technical standard against which everything is measured. Kenya’s construction sector now operates under the National Building Code 2024, which came into full legal effect on 1 March 2025, replacing building regulations in place since 1968. Whatever a developer specifies in a sale agreement- finishes, structural design, fire safety provisions, it cannot legally fall below what this code requires. That gives a buyer a fixed, checkable reference point, rather than having to take a developer’s word for what “industry standard” means.

From NCA Compliance to Occupation Certificate: The Paper Trail Behind a “Ready” Unit

The NCA is one link in a longer chain of approvals a building has to pass through before anyone can legally move in. After NCA project registration and site compliance are in order, the county government still has to issue its own occupation certificate, the document that legally confirms a completed building was constructed to the approved plans and is safe for occupation, following a final multi-departmental inspection. That final inspection typically checks structural integrity, fire safety installations, sanitation systems, and electrical work against the approved drawings; in other words, a second, independent look at many of the same fundamentals the NCA has already been monitoring during construction. Occupying or letting a unit without that certificate is not a paperwork gap a buyer can safely ignore; it can complicate insurance claims, utility connections, and the property’s own resale down the line. An NCA compliance record and a county occupation certificate are two different documents from two different authorities, and a buyer is entitled to ask for both.

How to Actually Use This as a Buyer

• Ask which NCA category the main contractor is registered under, and compare it to the scale of the development; a large apartment block built by a contractor registered for small works is worth questioning
• Ask to see the project’s NCA site compliance status, particularly for a development still under construction
• Confirm the building has, or will have before handover, a county occupation certificate, not just a developer’s own “completion” letter
• Use the Authority’s public contractor registry to verify a registration number independently, rather than relying solely on a certificate shown by the developer or contractor
• Treat a reluctance to share any of the above- registration category, compliance status, occupation certificate- as a question worth pressing on, not a detail to let go

In Summary

The National Construction Authority will never be the reason a buyer falls in love with a unit, but it is one of the few checks in the process that exists independently of the developer’s own marketing. A registered contractor working within their actual capacity, a site that has passed compliance inspection, and a building that holds a proper occupation certificate are not guarantees that nothing will ever go wrong; but they are the difference between a claim a buyer has to take on faith and one they can actually verify. The paperwork exists precisely so a buyer does not have to rely on trust alone, and asking for it costs nothing but a conversation most developers should be entirely comfortable having.