Hidden costs in land ownership

August 28, 2025 by

Collins Mutegi Njagi

Hidden Costs in land ownership

1. Stamp Duty

This is a compulsory tax payable during property transfer — and it’s calculated based on the current market value of the property (as assessed by a government valuer), not the price you agree on with the seller.

- Urban/residential property: 4%

- Rural/agricultural land: 2%

2. VAT (Value Added Tax)

Applicable mainly to commercial property, charged at 16%.

It may also apply to:

- Developer legal costs (especially for new housing projects)

- Share transfers in gated communities or sectional titles

- Off-plan purchases and related services

Most rural land transactions are exempt but confirm with your lawyer or tax expert.

3. Capital Gains Tax (CGT)

Charged at 15% on the net profit made by the seller from the property sale — not the total sale price.

Tip: Even though the seller pays this, some may try to pass the cost onto the buyer, so negotiate clearly.

4. Land Rates & Land Rent

- Land Rates: Annual tax levied by county governments on landowners (mainly in towns).

- Land Rent: Annual fees charged on leasehold properties by the national government.

⚠️ Always confirm the seller has paid all pending balances — any unpaid rates or rent will become your responsibility after purchase.

5. Legal Fees (Advocate’s Fees)

Hiring a conveyancing lawyer is crucial — and comes with its own costs:

Legal fees are typically capped and guided by the Law Society of Kenya (LSK) scale

Subject to 16% VAT

Other related costs include:

- Obtaining clearance certificates (e.g. rates, rent, consent to transfer)

- Consent from land boards or relevant ministries

- Notarization, printing, filing, and transportation

6. Title Registration & Transfer Fees

These cover the processing and issuance of the title deed in your name. Also included are fees for updating survey plans, boundary demarcations, and map acquisitions if needed.

7. Valuation Fees

Before stamp duty is assessed, the Ministry of Lands conducts a mandatory valuation of the property.

You may also choose to hire a private valuer (at your own cost) for a second opinion — especially to avoid being overtaxed.

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Why is Land Survey important?

Land survey is the process of measuring and mapping land to determine its boundaries, size, and features. It is important because it confirms legal ownership, prevents boundary disputes, and ensures accuracy in construction or land development.

When should I get a land survey?

Buying or selling land
Subdividing land
Resolving disputes
Building a home or fence
Applying for a loan against title deed

How much does land survey cost?

The cost depends on several factors such as size of land, location, terrain, type of survey (boundary, topographical, subdivision), and legal requirements. In Kenya, survey fees may also include government levies, registration fees, and stamp duty.

What documents do I need before a survey?

You will typically need: -

Copy of title deed or allotment letter
Land Registry map (RIM)
National ID and KRA Pin
Consent from Land Control Board (for rural property)

How long does survey take?

A basic boundary survey can take a few days, while subdivision and registration processes may take several weeks depending on approvals from lands offices.

Can survey help with land dispute?

Yes, a survey provides official measurements and maps that can be used as evidence in resolving disputes with neighbours in court.

Will I get my documents after the survey?

Yes, depending on the type of survey. For subdivisions, you will receive new mutation forms and updated title deeds. For boundary surveys, you will get a survey plan/map confirming your parcel details.

What is a cadastral survey?

A cadastral survey is a survey that establishes and records property boundaries in relation to the legal land register. It produces official maps and records used for issuing title deeds.

Do land surveys expire?

No, a survey itself does not expire. However, if land is subdivided, amalgamated, or new developments occur, a fresh survey may be required to reflect their changes.

Can I use old survey maps for new developments?

It’s not advisable. Old maps may be outdated due to changes in land laws, infrastructure, or subdivisions. Always request a current survey to avoid boundary or legal issues.

I have a title deed, is a survey really necessary?

Yes. A title deed shows ownership, but a survey confirms the exact location, size, and boundaries of the land. Many disputes occur because titles are not verified with proper surveys.

How do I know if my land has been surveyed?

Existence of survey beacons on the ground.
A survey plan/map from the Ministry of Lands or Survey of Kenya.
A registered survey number linked to your title deed.

What is the difference between freehold and leasehold land?

Freehold land: The owner holds it indefinitely; surveys establish boundaries for title deed registration.
Leasehold land: Ownership is for a set period (e.g., 99 years); surveys are required for allocation, renewal, or subdivision.

What is the difference between a land surveyor and a land valuer?

A land surveyor measures, maps, and defines land boundaries.
A valuer estimates the market value of land or property.

Both services are often needed in land transactions

Can I survey only a portion of my land?

Yes. If you want to subdivide or sell part of your land, a surveyor can measure and map only the portion in question, subject to Land Control Board approval.

What happens if Title Deed is different from actual land size?

Discrepancies can occur due to errors in older maps or encroachment. The surveyor will prepare a report, and you may need to apply for rectification at the Land Registry.

What is amalgamation?

Amalgamation is combining two or more land parcels into a single larger parcel.