Buying a home in Kenya involves several costs beyond the advertised purchase price. These can broadly be categorized into government taxes and fees, legal and professional fees, and potential mortgage-related costs.
Here's a breakdown of the typical costs you can expect:
I. Government Taxes and Fees:
Stamp Duty: This is a significant tax levied on property transactions. It's calculated as a percentage of the property's purchase price or market value (whichever is higher) as determined by a government valuer.
Urban areas/Municipalities: 4% of the property's value. This applies to gazetted towns and municipalities.
Rural or Agricultural land: 2% of the property's value.
Mortgage/Charge Registration: If you're taking out a mortgage, there's usually a stamp duty of 0.1% of the loan amount to register the charge.
Important Note: Stamp duty must be paid within 30 days of assessment for locally prepared instruments, or within 30 days of receiving documents executed abroad for local registration. Non-payment invalidates the transaction.
Title Search and Registration Fees:
Title Search: This is a crucial step to verify ownership history and any encumbrances on the property. Fees are generally low, around KSh 500 - KSh 1,500.
Registration of Transfer: This is the fee to register the property in your name after the purchase is complete. It typically ranges from KSh 500 to KSh 5,500.
Land Rates and Land Rent Clearance:
Land Rates: Levies payable to county governments. You'll need a clearance certificate to show zero arrears. This certificate is often free, but some counties might charge a small fee.
Land Rent: A levy on leasehold parcels of land payable to the Ministry of Lands. A clearance certificate is issued free of charge once arrears are cleared.
Consent to Transfer: Permission from the relevant authority (e.g., Commissioner of Lands for leasehold properties) to transfer ownership. There might be a small fee (e.g., KSh 1,000).
II. Legal and Professional Fees:
Legal Fees (Advocate's Fees): You'll need to hire a lawyer (advocate) to handle the legal aspects of the purchase, including conducting due diligence, preparing documents (like the sale agreement), and facilitating the transfer of ownership at the Lands Registry.
Legal fees typically range from 1% to 2% of the property purchase price, depending on the complexity of the transaction and the property's value. The Advocates Remuneration Order governs these fees.
VAT (Value Added Tax): 16% VAT is applied to legal fees and disbursements.
Valuation Fees: Before obtaining a mortgage or for stamp duty assessment, a valuation report is usually required to determine the property's market value.
Valuation fees vary but typically range from 0.25% to 1% of the property value, or a fixed amount (e.g., KSh 10,000 - KSh 30,000) depending on the size and location of the property.
Real Estate Agent Fees/Commission: If you used a real estate agent to find the property, they might charge a commission. This is typically a percentage of the purchase price, often around 3%, but this is usually paid by the seller unless otherwise agreed. However, some buyers also engage agents to find properties for them, in which case the buyer might pay a commission.
Survey Fees: If land demarcation or a new survey is required, you'll incur survey fees, which can range from KSh 20,000 to KSh 100,000 depending on complexity.
III. Mortgage-Related Costs (If Applicable):
Loan Processing/Facility Fees: Banks charge a fee to process your mortgage application, typically ranging from 0.5% to 2.5% of the loan amount.
Mortgage Protection Insurance: Lenders often require life insurance cover over the applicant's life and fire/other perils insurance over the property. These costs vary based on the loan amount and property value.
Mortgage Legal Fees: You may incur legal fees for the bank's lawyer to register the mortgage/charge on the property.
Negotiation Fees: Some lenders may charge a negotiation fee (e.g., 2%).
IV. Other Potential Costs:
Utility Connection Fees: When moving into a new home, you may need to pay fees to connect electricity, water, and gas.
Homeowners Association (HOA) Fees: If you're buying in a gated community or a development with shared amenities, you'll likely pay monthly or annual HOA fees for maintenance and upkeep of common areas.
Maintenance and Renovation Costs: Factor in ongoing maintenance, repairs, and any renovations you plan to make.
Disbursements and Hidden Costs: These can include notarization and commissioning of documents, courier and filing costs, bank charges (for escrow accounts), and costs for preparing affidavits (e.g., spousal consent).
It's crucial to budget for these additional costs, as they can significantly impact your overall home buying expenses. Always consult with a reputable real estate agent, lawyer, and financial advisor in Kenya to get precise figures for your specific situation.

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