Stamp Duty Rates in Kenya.
Stamp duty is an amount of money charged on several transactions such leases, transfer of properties, and securities.
Below are the rates for stamp duties according to the stamp duty act Kenya.
Transfer of real estate/landed property in urban areas costs 4% while transfer in the rural areas will have a 2% rate.
When creating or increasing the share of the capital, the duty calculator Kenya charges a person 1%
When registering a company with a nominal share capital, the amount is 0%
According to stamp duty Kenya, when transferring marketable securities and unquoted shares one pays the rate of 1%
An exemption for stamp duty charges is put on the transfer of quoted shares, and marketable securities.
When participating in registration of mortgage or debenture, for collateral security, you will be charged 0.05%, while for extra protection it will amount to KSHs.20 per counterpart.
Individuals who want to carry out a lease will part with at least 1% for the annual rents for three years, while for a period over three years, they will part with 2% of the yearly rent.
KRA stamp duty forms
All forms are completed from the Ministry of Lands and Housing. The quadruplicate is received upon the presentation of documents, which attract a stamp duty.
The quadruplicate is handled by an agent, duty payer or advocate who takes it to either National Bank or Kenya Commercial Bank for payment.
Bank charges are minimal and bared by the person paying for the duty. The money for the duty and amount for the bank is paid through either a banker’s cheque or cash.
After payment, the original copy of the payment form is retained by the person paying for presentation. The distribution of the document is such that :-
1) The quadruplicate, which is yellow in color, remains in the bank.
2) The triplicate, which is green in color, is forwarded to the registrar of titles and lands for record keeping.
3) The duplicate is blue in color and it is forwarded to the Commissioner of Domestic Taxes by the bank.
4) Finally, the original white copy remains with the duty payer.
Stamp duty act in Kenya
According to the stamp duty act Kenya, anytime you purchase a property, it is mandatory to pay revenue to the Government.
Therefore, one needs to determine the the stamp duty of the property they are purchasing.
Having a professional to advise is very critical in this exercise. Its a required that within 30 days of acquisition, all documents need to be stamped to avoid any penalties.
On the other hand, registered land acts and the land acts state that legal transactions involving mortgages, charges, transfers, and leases are not acceptable unless they have been duly charged.
Revenue that is paid to the Commissioner of Domestic Taxes goes to the Government, hence failing to pay the amount is a criminal offense. As a citizen in this country, you need to know how to pay stamp duty Kenya.
In cases where the paid amount exceeds the expected amount, application to get a refund should be made within one year.
It is advisable to stamp all official documents since they can be used in a court of law in case there is fraud.
As stated above the amount of revenue being paid varies depending on the location and jurisdiction where a person resides.
For instance, rural land attracts two (2%) percent of the value, while properties within urban areas attract a duty of four (4%) percent.
The act for stamp duty in Kenya is clear that revenue for a mortgage is pegged on the secured amount.
However, the legal land rates stand at two shillings for every KSHs. 1,000. Hence for instance, a mortgage going for KSHs five million attracts stamp duty of SHs 10,000.
For leased property, the stamp duty is based on the payable rent every year. Currently, it is not possible to conclude a land transactions within 24 hours. Property valuation has to be done before a stamp duty collector endorses the property.
When there are issues of doubt in value of property,the stamp duty collector is at liberty to ask for valuation.