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10 April 2024

Kenya's land transfers in gazetted towns/municipalities to be charged 4% tax under Stamp Duty Act

  • The Council of Governors has enumerated all gazetted urban areas and municipalities within various counties in Kenya.
  • Consequently, the Office of the Principal Secretary for Lands, Public Works, Housing and Urban Development issued a directive that 4% stamp duty shall be charged on the transfer of land within the gazetted towns and municipalities, effective immediately.
 

Executive summary

The Office of the Principal Secretary for Lands, Public Works, Housing and Urban Development on 5 April 2024 issued a communication informing all land registrars that the stamp duty on the transfer of land within gazetted1 towns and municipalities shall be charged at 4%, in line with the Stamp Duty Act.

Detailed discussion

On 4 April 2024 the Council of Governors issued a letter enumerating all gazetted urban areas and municipalities within various counties in Kenya.

Consequently, on 5 April 2024 the Office of the Principal Secretary for Lands, Public Works, Housing and Urban Development issued a directive addressed to all land registrars to the effect that going forward, stamp duty on the transfer of land within the gazetted towns and municipalities shall be charged at 4% in line with the Stamp Duty Act. Notably, this directive came into force immediately.

Gazetted cities and municipalities that fall within the ambit of the 4% stamp duty rate include Kitengela, Kajiado, Kilifi, Watamu, Diani, Limuru, Nakuru, Naivasha, Kericho, Murang'a, Ruiru, Kiambu, Kabete, Narok, Machakos, Mandera and Lodwar, among many others.

Emphatically, any noncompliant officer shall be held personally liable and surcharged to the extent of the lost revenue.

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Endnote

1 Kenya's Local Government Act, an "Act of Parliament to provide for the establishment of authorities for local government," provides (in Section 5) that the establishment of a municipality, county or township, assignment of its name, definition of its borders, and appointment of certain public officers shall be published in the official Gazette.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young (Kenya), Nairobi

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2024-0767

 
 

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