FACTORS TO CONSIDER WHEN BUYING/SELLING AGRICULTURAL LAND IN KENYA.

Ownership history

It is important to do a background check on the ownership of the land you intend to purchase. Cases of fraud involving land have been on the increase in Kenya. Therefore, to avoid being duped, follow the legal procedures of ascertaining the landowners by conducting a land search at the relevant authorities.

Location of the Land

Location greatly determines the value of the property. For instance, land that is closer to the main road will have a higher value compared to the one that is far away. You also need to consider how accessible the land is to other locations, especially if you are planning to purchase land for putting up commercial or residential units.

Land survey

Survey must be conducted to ascertain the actual measurements of the land. You must also do a topographical survey of the area the land is located. This will prevent disasters and losses that might be incurred due to calamities such as floods and landslides.

Accessibility of service provisions and basic amenities

Look out for land that is closer to basic service provisions and amenities such as water supply, electricity, sewerage disposal and accessible roads.

Payment of Stamp Duty and Capital Gains Tax (CGT)

CGT is chargeable on the gains that are made by a person on transfer of immovable property. It is due on or before the application for transfer of the property at the relevant Lands office but not later than the 20th day of the month following the transfer at the rate of 5%. It is charged on the difference between the sales proceeds and the adjusted cost which constitutes the historical cost and any incidental cost incurred in the property’s enhancement, preservation, and defense of title. Immovable property constitutes land, buildings, and unquoted shares. Failure to remit CGT on time attracts a penalty of 20% of the tax due and interest at 1% per month for the period that the tax remains unpaid.

The applicable rate of Stamp duty is either 1%, 2% or 4% depending on the nature of the property and its location. 1% applies to transfer of unquoted shares while 2% and 4% apply to immovable property located in rural and urban areas, respectively.

Relevant consents

  1. The rates clearance certificate
  2. The rent clearance certificate
  3. Consent of the National Lands Commission
  4. Land Control Board consent
  5. County Government consent
  6. Lessor’s consent
  7. Spousal consent

Contact us for any assistance in buying or selling land.

wambui@wkadvocates.com

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