Increase in Stamp duty on Land Transfers in Gazetted Urban areas and Municipalities
On 5th April 2024, the Principal Secretary in the State Department for Lands and Physical Planning issued a significant directive regarding stamp duty on Land transfers. The notice was to take immediate effect and stated that the Stamp Duty rate on land transfers within Gazetted Urban Areas and Municipalities would increase from 2% to 4% in accordance with the provisions of the Stamp Duty Act.
This directive affects 81 Municipalities and 2 Cities, including Nakuru, Meru, Watamu, Mtwapa, Mariakani, Bura, Kitale, Chuka, Isiolo, Malaba, Mavoko, Timau, Maua, Dadaab, Garissa, Kikuyu, Maseno, Molo, Gilgil and Gatundu among others. These areas had previously been designated as urban areas and Municipalities; however, the mandated Stamp Duty had not been implemented uniformly. (See full List)
This new policy has been implemented and aims to ensure uniformity, compliance and increase the Governments revenue from land transactions within these jurisdictions. The notice further stated that any officer, mainly the Land Registrar’s, found non-compliant with the directive would be held personally liable and surcharged for the lost revenue. Similarly, anyone dealing in land transactions and failing to pay Stamp Duty within the required time frame risks invalidating the transaction and/or incurring fines.
This information is crucial for our Clients, as Stamp duty is a legal requirement to validate and record land transactions. Compliance with these legal requirements is essential to avoid penalties and legal consequences. Many individuals encounter stamp duty for the first time during real estate transactions, where it can significantly impact the overall cost of purchasing property. Stamp duty rates vary between regions, so it is important to research the applicable rates and exemptions before entering into any transactions.
If you have any queries relating to the above, please do not hesitate to contact Dennis W. Muhindi at or Liza Mutungi . Please note that this publication is meant for general information only and should not be relied upon without seeking specific subject matter legal advice.
