Buying land in Kenya: When you’re ready to acquire a piece of Land, there are some pre-requisites which you need to adhere to so that the land you buy is legitimate.
Below, Felista Wangari, a personal finance coach and the administrator of the 52 Week Savings Challenge  personal finance group, will take you step by step on the process you need to follow when buying land in Kenya.
In every land deal, It is highly recommended that you use a Lawyer. It is costly but safest. BY ALL MEANS NEVER CUT CORNERS.
1). Conduct a site visit
This is the first step to buying land in Kenya. Identify the piece of land that you wish to purchase and ensure that the beacons of the land are clearly marked.
Keep in mind that in ancestral land there may be no beacons. The beacons give a clearer vision of the shape and size of the land and its actual boundaries.
2). Perform an official search
Your lawyer then performs a land search in Kenya at the District Lands Office or the Ministry of Lands (Ardhi House). To perform the Search, you will need a copy of the title deed of the land and you must fill the search application form and attach the title.
You pay Sh. 500. It takes a maximum of three working days to get search results after filing a search application form and attaching a copy of the title.
When buying land from a company, you need to do a company registry search at Sheria House, division of company registration, to ascertain that you are actually dealing with a duly incorporated company.
4). Search at the county office
This one helps to unearth any unpaid land rates which should be factored in the purchase price.
5). Obtain two land maps.
These ones are obtained from Survey of Kenya after buying Kshs 300. One map is usually drawn to scale, and the other one is an overview of the lands adjacent to the one you want to buy.
6). Ground verification
Once you have obtained the maps, you should visit the land together with a surveyor to verify the dimensions.
What it will cost you to build two, three, and four bedroom house today
7). Preparation of the sale agreement
Once you have verified the authenticity of the land, a sale agreement is then prepared by the sellers Lawyer.
Your advocate should prepare a letter of offer or intent showing the details of the seller and purchaser, the description of the property on offer, and the proposed purchase price and modes of payment.
It is important for the buyer to fully understand the terms of sale for the transaction. Their advocate should be able to clearly explain the clauses in the agreement and their implications.
Once the terms are agreed upon between the parties, the advocates will facilitate and witness the execution of the sale agreement
8). Preparation of the documents
The seller must prepare all the completion documents to ensure a proper transfer. The Completion documents will include:
a). Original Title in the name of the seller.
b). Duly executed transfer forms in triplicate (must be sealed if a company is selling)
c). 3 Passport Photos of the Vendor if it’s an individual and if a company, then 3 photos each of 2 directors of the company
d). Copy of Pin Number of the Vendor
e). Copy of National ID of the Vendor and if a company copies of National IDs for 2 directors who’ll sign the transfer forms.
f). Copy of the registration Certificate if it’s a company.
g). PIN Certificate of Company
h). Rates Clearance Certificate (In Case the tenancy of the land is leasehold)
i). Rent Clearance Certificate (In Case the tenancy of the land is leasehold)
j). Land control board license.
Your lawyer should confirm that the documents are authentic and must certify the documents before presentation to the relevant Lands Registration Office
By all means NEVER pay your cash until the seller has shown you these documents. If they are not available, NOTE you will never manage to transfer the title to your name legally, unless through other dubious means.
9). Pay to the seller.
It is important for the buyer to fully understand the terms of sale for the transaction. Their advocate should be able to clearly explain the clauses in the agreement and their implications.
Once the terms are agreed upon between the parties, the advocates will facilitate and witness the execution of the sale agreement.
READ: Everything You need to Know When Buying Land
Upon the execution of the sales agreement, the agreed deposit is paid by the purchaser through their advocate to the seller’s advocate’s account. This is the safest way to safeguard the buyer’s money and at no point should the buyer send money directly to the seller’s account.
10). Payment of Stamp duty
When buying land in Kenya, the draft transfer documents should be filed at Lands Office for assessment of stamp duty payable on the transfer. Other than the aforementioned documents, the buyer must attach his copy of ID, passport photos and copy of PIN.
After this, the government valuer conducts a site visit to verify the development and state of the property. The stamp duty is 2% (agricultural land) and 4% of land within the Local Municipality.
For purposes of stamp duty, an application for valuation is always made to the government valuer, who makes a site visit to enable him or her to prepare the requisite valuation report. Stamp duty is important as it is used in registering the property.
11). Registration of transfer
Once the registration process is complete, the legal ownership of the land shall have legally changed hands.
To facilitate registration of transfer, the original title deed of the land, duly stamped transfer documents, original stamp duty assessment forms and receipt, stamp duty valuation report, original paid-up land rents receipts and clearance certificate, original land rates clearance certificate, consent to transfer, and application for registration are required.
12). Exchange of documents
When the registration is done with issuance of a new Title deed (for freehold tenancy) or Certificate of Lease (Leasehold tenancy). The buyer’s lawyer or the buyer then collects the Title Deed at the Lands Office.
The completion documents from the seller’s advocates include the original title deed of the land, the signed and witnessed transfer documents in favour of the buyer, the original paid-up land rents receipts and clearance certificate, the original land rates paid-up receipts and clearance certificate, and the consent to transfer.
Thank you for sharing this detailed post.
I just have one question regarding Capital Gains Tax (CGT). This tax came into effect January 2015. Details about it are here http://www.kra.go.ke/notices/pdf2014/Capital-Gains-Tax-Guidelines.pdf
CGT attracts a charge of 5% of net gain. According to KRA, CGT is to be paid by the transferor or person transferring property.
The seller should pay CGT and share this information with the buyer because when paying stamp duty through i-Tax, the process will not be complete without a CGT reference number.
Hence my question:
Would it be professional or okay to deduct capital gains tax from the purchase price of land so that the buyer can pay for this charge later while settling stamp duty fees in order to avoid a situation where the seller refuses to pay for Capital Gains Tax after completing the land transaction?