In general, local authorities in Kenya tend to use a uniform area rate or a uniform tax rate structure. As Table 4 indicates, the tax rates range from 2 to 22 percent applied to the values contained on the valuation rolls. The median tax rates are 6 percent for both municipalities and towns and 5 percent for counties. How to Pay property Tax in Kenya
ON KRA ITAX
One of the functions of KRA is to partner with other entities to collect revenue on their behalf. This is known as agency revenue, with Stamp Duty being one of them.
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.
For transactional instruments that are prepared locally, the tax should be paid within 30 days. However, for documents executed abroad and sent for registration locally, Stamp Duty must be paid within 30 days of receiving the documents. When Stamp Duty is not paid within that time frame, this results in the invalidity of the relevant transaction, any agreement signed between the parties becomes null and void, and the same is inadmissible in a Court of Law as evidence. Failure to pay the revenue also leads to a fine that is assessed at five percent (5%) of the principal assessed Stamp Duty for every quarter from the date of the instrument.
Previously, when dealing with a transaction that would attract Capital Gains Tax (CGT), for example purchasing a property or transfer of shares, then the payment of Stamp Duty would only be processed if the CGT has been paid. Early this year, the process was simplified via the iTax system and the two payments are no longer twinned. One can now successfully process Stamp Duty payment without the mandatory acknowledgement number that was required from the CGT payment on the iTax system.
The change was introduced to improve ease of doing business by creating efficiency in the process. Thus, the unnecessary delay that came with the waiting for one party to make a certain payment first, is now a thing of the past.
To pay stamp duty:
- log on to the iTax portal.
- Under the payment menu, select “Payment Registration”.
- Select the tax head applicable as agency revenue, and the subhead as Stamp Duty.
- Fill in the applicable details all the way to the end and submit after which you get the payment slip.
- Thereafter, make the payment either through the bank or using the M-PESA PayBill Number 572572.
This process is quite seamless and one of the simplest in the iTax system.
Procedure The median tax rates are 6 percent for both municipalities and towns and 5 percent for counties. How to Pay property Tax in Kenya
- Pay In Person
- Carry the property tax invoice to the municipal office of your area
- Pay the amount in cash at the counter
- You will get an acknowledgement for your payment, keep it handy
- Pay Online
- Using a browser, enter the URL of your district municipality.
- Select the area, assessment code, or property tax details as listed in the website and then proceed to make the payment based on the payment mode (Mpesa mobile money,Credit Card, Debit Card, Internet Banking, Pay pal).
- A receipt is generated for your payment, save it to your desktop or laptop for reference or you can print it.
You will require the property tax invoice details to pay the amount.
Office Locations & Contacts
- MINISTRY OF LAND, HOUSING & URBAN DEVELOPMENT
1ST NGONG AVENUE
P.O. BOX 30450-00100
You should be a Kenyan citizen and your age should be of 18 years.
The rates for these charges and fees vary from province to province in Kenya.
The property tax amount is calculated based on the residential area. So, it varies from one property type to other.
Where the income earner is a corporation, the corporate tax rate in Kenya is thirty per cent (30%) of the annual profit of the corporation; and where the income earner from a property transaction is an individual or a registered business enterprise or partnership, the graduated tax rate is twenty-five per cent (25%) for individuals earning Kshs.3,200,000 and above, per annum.
The property tax document is valid for one year only. Every year, you should renew it.
The processing time is immediate
- You can pay property tax in person and online.
- You should have valid property tax particulars.
The consent of the Local Governor of every District is therefore required for any transfer of any interest in any land (real property) situated in urban areas;
The property tax particular is required to pay the property tax.
Need for the Document
In Kenya, the Rating Act allows local authorities to tax either land or land and improvements (e.g., buildings.
All property Rates in Kenya are currently levied only on land.
The owner of an apartment, land, building has to pay the property tax to the Government of Kenya. The governing authority of the jurisdiction levies the tax to the owner in which the property is located.
There are various taxes that apply to real estate or real property transactions in Kenya. The common public representation or perception that there are no real property or real estate taxes in Kenya is not correct.