This is a continuation of a 6 Part Series on Taxes and Real Estate in Kenya. The introductory post can be found here.
Land tenure is the name given, particularly in common law systems, to the legal regime in which land is owned by an individual, who is said to “hold” the land.
Over history, many different forms of land ownership, i.e., ways of owning land, have been established. This Part of the Series shall concentrate on the costs incurred from Land Acquisition up to the time the Land Title is registered in the name of the Project/The Developer.
In a Joint Venture Agreement, I would like to note that a Company formed between the Land Owner and the Financier can carry the title of “The Developer”. Thus, i would like my readers to acknowledge this distinction. It is possible for the name of an apartment to be the same as that of The Developer especially in a Joint Venture Agreement.
1.1 Land acquisition
Stamp Duty – A tax levied on the value of the land transaction.
- 4%- Within Municipality
- 2%- Outside Municipality
1.2 Surveyors Fees
To clearly establish the boundaries before land is registered
- 1.2.1 Option 1: Government Surveyor- Kshs.2,450.00 per plot
- 1.2.2 Option 2: Private Registered Surveyor- Kshs. 15,000+ per plot
1.3 Conveyancing- Transferring land ownership from the seller to the buyer
1.4 Title Registration Costs
Registrative Cost is levied as a charge for the services offered by government in registering the land under new ownership/ processing fees
This is levied at Kshs. 250 per lease
Once The Developer has acquired the Land, it can proceed to the next phase of engaging Consultants to do the design, Documentation and Tendering.
The Other Parts of the Series are
Part 1 | An Overview
Part 3 | Consultancy Costs
Part 4 | Construction Costs/Taxes
Part 5 | Ownership Costs
Part 6 | Economic Impact of Taxes & Proposed Solutions