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Land Valuation for Stamp Duty Calculation in Kenya

Land Valuation

Did you know that the Ministry of Land’s Department of Valuation independently calculates the market value of a piece of land on sale to establish the right amount of tax to collect from a sale?

Stamp Duty

Stamp duty is a tax levied on land transactions. It is also levied on cheques, receipts, military commissions, marriage licenses and shares. It is your duty as a land buyer to pay stamp duty to the government.

The Kenyan law tasks the Kenya Revenue Authority (KRA) with stamp duty collection. Therefore, you will submit the tax to the KRA when buying land.

Land Valuation for Stamp Duty Calculation

When buying land, you agree on the price with the seller. However, the KRA does not necessarily use the buying price you have agreed with the seller when the revenue authority calculates the stamp duty for the land transaction.

The government conducts an independent land valuation through the Department of Valuation. The valuation’s goal is to determine the market value of the land at the time of the sale and use the same to calculate the appropriate stamp duty.

The reason why the government does not rely on the price you have agreed with the land seller when buying land is that it can be significantly below the market value. Thus, resulting in the government generating less tax revenue.

How to Apply for Land Valuation

To get the land you intend to buy valued for stamp duty calculation, you must fill out a land valuation form at a land registry in the county where the land you are buying is located.

The data that you will be required to provide in the valuation form include the following:

  • The seller’s name
  • The Buyer’s name
  • Plot number
  • The Area where the land is located
  • Whether you are buying or leasing the land
  • The value of the land, if any, submitted by parties   

Land Valuation Form
A Land Valuation Form

A government valuer will visit the land you intend to buy and independently calculate its market value. If the valuer establishes that the land value you indicated in the valuation form is below the market value, they can raise the same and use the new figure to calculate the stamp duty you will be required to submit to the KRA.

Valuation for stamp duty calculation is a mandatory step in the land-buying process. Make the necessary arrangements to ensure the same happens and pay the calculated stamp duty within 30 days after assessment.     

Location: Kenya

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