State and Explain All the Property and Land Taxes Charged During or After Any Process,

when it is Levied, who it is Paid to, and the Rates of Each Type of Tax.
Taxes are the main sources of revenue for the government which enable the running of the
government’s activities and development projects. On the issue involving land and property and
transactions involving them, the government levies different types of taxes depending on the
value of the property in question. The taxes are levied on the property and land owners and the
taxes collected by the various government agencies—local governments, county governments.
The various taxes levied by the government on property and land include; land rates, capital
gains tax, rental income tax, stamp duty, among others. the essay aims to discuss the various
taxes, who they are paid to, when they are paid, and the rates of the specific taxes.
Land Rates
Land rate is the tax levied by the local/county governments within a municipality. The land rates
are payable to the county government annually for both freehold and leasehold properties. Land
rates are paid for the services offered by the local government such as; water and sanitation
services, sewerage services, and even development projects such as installation of security lights.
The land rates are imposed under the Rating ACT, and the Valuation for Rating Act allows the
county government to value the land for the sole purpose of determining the land rates. Some
entities such as; educational institutions, public religious centers, cemeteries, among others are
exempted from the rates.
Land rates are usually paid annually and is paid to the local county governments. The payments
are to be done within specific deadlines with penalties for late payments. A clearance certificate
is issued after the payment showing the payments is covered.
Land Rent
Land Rent is the rental amount payable to the government—national or county, or state entities
for leasehold titles. Land Rent is payable annually to the Ministry of Lands and Physical
Planning, mostly before the end of January. The rates maybe revised as the government wishes,
but mainly revised when the lessee wants a development approval or when renewal for the lease
is required. However, it is only payable for leasehold property. After payment, a clearance
certificate is issued by the Ministry as proof of payment for the Land Rent.
Rental Income Tax
Rental Income Tax is the tax payable to the government by property owners who earn income
from renting or leasing out their immovable property. The framework for the imposition of the
Rental Income Tax is provided by the Income Tax Act (ITA). The property in question has to be
either residential or commercial. Any individual, partnership, or company renting out property
for either residential or commercial use is required to pay the Rental Income Tax. Rental Income
Tax is payable to the KRA monthly on or before the 20th of every month without expenses,

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losses, or capital deduction. The KRA has appointed agents to withhold and pay a percentage of
the gross rent as tax to facilitate compliance.
Rental Income Tax is payable when the rent is between Kes. 288,000 and Kes. 15 million
annually. If the property owner receives rent below Kes. 288,000 or above Kes. 15 million
annually, they are required to declare the Rental Income Tax when filing their annual income tax
returns. The residential Rental Income Tax rate is 10% of the gross rent received from the tenants
monthly and is payable upon receiving rent form the tenants—either monthly, quarterly, semi-
annually, or annually. Property owners receiving more the Kes. 15 million annually are under the
commercial Rental Income category and are required to pay corporate tax of 30% or be taxed on
an individual graduated scale. Rental income is subject to a 10% Withholding Tax that applies to
rent payable for residential and commercial property. Incase the landlord does not receive any
rent, h/she should file NIL return.
Capital Gains Tax (CGT)
Capital Gains Tax is the tax charged on the gain upon the transfer of immovable property—land,
building or shares for companies not listed in the Stocks Exchange. CGT is payable to the KRA
when declaring the property or shares sale. According to the Income Tax Act as amended by the
Finance Act (2023), as of 1st January 2023, the tax remittable is 15% on the net gains upon the
transfer of property (land, buildings) or shares situated in Kenya. The net gain is defined as the
excess of the net transfer value over the adjusted cost of the transferred property. Capital gains
should be paid on or before the transfer of the property, and the payment should not be made
later than the 20th day after the transfer.
However, the following transactions are exempted from the Capital Gains Tax;

• Transfer between spouses as part of divorce settlements

• Agricultural property having an area of less than 50 acres situated outside a
municipality/urban area
• Issuance of a company own shares
• Shares of local authority
• Transfer of property for administering the estate of a deceased person where transfer is
completed within two years of death
• Transfer of property under internal restructuring within the group without transfer to a
third party
• Property being transferred by an individual where the transfer value is not more than Kes.
3 million, among others
Stamp Duty Tax
Stamp Duty is the tax payable during the sale and purchase of a property. It is the tax payable by
the property buyer when settling the purchase to ensure registration of the transfer. The Stamp
Duty is based on the price of the property being sold or purchased. In urban areas, it is 4%, while
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in the rural areas, the Stamp Duty is 2%. Stamp Duty Tax is payable within 30 days after
completion of the transaction, and failure to pay results in the transaction being invalid making
the agreement between the parties null and the transaction becoming invalid according to the
law. Stamp Duty is payable to the government agency responsible for the specific transaction, for
instance; when transferring land or property, the payment is made to the Lands Registry.
However, one can apply for exemptions of Stamp Duty when;

• Transfer by family to a limited company wholly held by members of the same family
• Transferring between associated companies
• Transfer between spouses
• Transfer in favor of any body established for charitable purposes
Property and land taxes levied by the government are a major revenue source for the government
and play avital role in the funding of development projects within the country. Understanding
different property and land taxes, when they are required to be paid, and the authorities which the
payments are made is crucial information for property or future property owners. The taxes
include; land taxes, land rates, capital gains taxes, stamp duty, among others. understanding the
dynamics and different rates of these taxes is important information.

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 References
Ramadhan, S. N. (2019). Critique of the Land Value Taxation Laws and Its Impact on the Right
to Ownership of Property in Kenya: a Case Study of Mombasa County (Doctoral
dissertation, University of Nairobi).
Wathome, E. M. (2016). Analysis of development control regulations’ compliance in Kitengela
town, Kajiado county, Kenya.