Process of buying property in Kenya

Process of buying property in Kenya

Are you planning to buy a property in Kenya? Whether you’re a first-time buyer or an experienced investor, understanding the legal process is crucial. This guide walks you through the key steps, from identifying the property to completing the transfer of ownership.

Types of Property Ownership in Kenya

Before purchasing property, it’s important to understand the two main types of land ownership in Kenya:

1. Freehold Property

• Grants the owner absolute ownership of the land.
• No ground rent is required.

2. Leasehold Property

• Ownership is granted for a fixed period (up to 99 years for non-citizens).
• Leases can be renewed upon expiry.
• Ground rent is usually payable annually.

Step 1: Identify the Property You Want to Buy

There are several ways to find property in Kenya:
✔️ Word of mouth from family and friends.
✔️ Real estate agents and property listing websites.
✔️ Newspaper advertisements.
✔️ Lawyers handling property sales for clients.

Once you’ve found a suitable property, proceed to the next step—legal due diligence.

Step 2: Conduct Legal Due Diligence

Hiring a lawyer at this stage is highly recommended. They will help verify the property’s ownership, check for legal issues, and ensure a smooth transaction.

Key Due Diligence Steps

1. Conduct a Land Search at the Ministry of Lands

A search at the Lands Registry confirms:
✅ The legal owner of the property.
✅ Whether the land has any encumbrances (e.g., unpaid loans, disputes, or caveats).
✅ If land rates or rent are outstanding.

This process usually takes 1–3 days.

2. Check the Company’s Status (If Buying from a Company or Housing Sacco)

If purchasing land from a company or Sacco, request a CR12 form from the Registrar of Companies to verify:
✔️ The company is still legally registered.
✔️ The names of the company’s directors.

Additionally, conduct a case search on the Kenya Law Reports to check for any ongoing lawsuits against the seller. If possible, visit the company’s offices to confirm their legitimacy.

3. Obtain a Land Survey Plan

A Land Survey Plan is a detailed map that shows:
📍 The property’s exact boundaries.
📍 The physical features and building locations.

This document is issued by the Department of Survey under the Ministry of Lands and Physical Planning.

4. Get a Land Clearance Certificate & Land Rent Certificate

For leasehold properties, any outstanding land rates or rent must be cleared before obtaining a Land Clearance Certificate.

Step 3: Property Valuation & Stamp Duty Payment

Before the transfer, the property must be valued by a Government Valuer to determine its market worth.

Stamp Duty Rates in Kenya

The stamp duty payable depends on the property’s location:

• 4% for urban properties.
• 2% for rural properties.
• Exemptions may apply for first-time home buyers under affordable housing schemes.

💡 You’ll need the Kenya Revenue Authority (KRA) PIN for both the buyer and seller to process stamp duty.

If the seller makes a profit from the sale, they may also be required to pay Capital Gains Tax (CGT).

Step 4: Sale Agreement & Transfer of Ownership

Once due diligence is complete, your lawyer will draft a Sale Agreement outlining the terms of the transaction.

Key Aspects of the Sale Agreement

✔️ The agreed purchase price.
✔️ Payment terms (often, a 10% deposit is required upon signing).
✔️ Timelines for completion of the transfer.

Required Documents for Transfer of property in Kenya

Both the buyer and seller must provide:
📌 National ID/Passport.
📌 KRA PIN Certificate.
📌 Three passport-size photos.

Once all documents are in order, the property transfer documents are lodged at the Lands Registry for processing.

Step 5: Registration & Title Transfer

The Ministry of Lands reviews the submitted documents and officially records the change of ownership. This final step may take 4–6 months, though ongoing digitization efforts are expected to speed up the process.

Legal Fees for Property Transfer in Kenya

Legal fees for property transfers in Kenya are regulated under the Advocates Remuneration Order and are typically calculated based on the purchase price.