You’ve just fallen in love with a Ksh 585M house in Kitisuru or a Ksh 265M townhouse in Lavington. You’ve shaken hands, maybe even paid the deposit. Then someone whispers “don’t forget the taxes” and suddenly you feel like you’re back in a KCSE exam you didn’t revise for.
Relax. Here is every single property-related tax and fee you will ever face in Nairobi in 2025 – explained step by step, with real numbers, real examples, and the perfectly legal ways smart people pay less (or nothing).
1. Stamp Duty – The Big One-Time Tax When You Buy
What it actually is: The government’s way of saying “welcome to the new owner club”.
2025 rates in Nairobi & municipalities:
- 4 % of the purchase price or market value (whichever is higher)
- 2 % in rural areas
Real examples (2025):
- Ksh 450M home in Karen → Ksh 18M stamp duty
- Ksh 185M townhouse in Westlands → Ksh 7.4M
- Ksh 80M plot in Ruiru → Ksh 3.2M
Who pays? Always the buyer unless you negotiate otherwise (and you absolutely should on big deals).
When do you pay? Before the title is transferred – paid online via iTax.
Legal ways to pay almost nothing:
- Transfer from parent to child or between spouses → 0.1 %
- First-time buyer scheme (only up to Ksh 8M property) → sometimes fully exempt
- Transfer to your own limited company → sometimes 1 %
2. Land Rates – Your Annual “County Tax”
What it is: Money Nairobi City County uses for roads, street lights, garbage collection, drainage.
How much after the 2024 revaluation?
- Karen, Runda, Muthaiga (low-density, ½–1 acre): Ksh 380K – Ksh 1.35M per year
- Lavington, Kileleshwa, Westlands (high-density): Ksh 180K – Ksh 720K per year
- Satellite towns (Ruiru, Syokimau, Ongata Rongai): Ksh 45K – Ksh 280K per year
How they calculate it: Plot size × zone rate × improvement factor (house quality).
Payment: Online via Nairobi County portal – usually two instalments (March & September).
What happens if you don’t pay? 2 % penalty per month + they can auction the property after 3 years (happens more than you think).
3. Land Rent – The One Almost Everyone Forgets
What it is: You own the house, but the land technically belongs to the government forever. This is your annual “ground rent”.
2025 rates in Nairobi prime areas:
- Karen/Runda/Muthaiga: Ksh 85K – Ksh 480K per year
- Lavington/Westlands/Kitisuru: Ksh 45K – Ksh 220K per year
You get a demand note every January. Pay late → interest + they can actually repossess the land (rare, but it has happened).
4. Capital Gains Tax (CGT) – When You Eventually Sell
Current rate: 15 % final tax on the profit (gain) Gain = Sale price – (original cost × official inflation adjustment)
Real 2025 example: Bought in 2011 for Ksh 95M → inflation-adjusted cost 2025 ≈ Ksh 448M Sell in 2025 for Ksh 780M → taxable gain Ksh 332M → CGT Ksh 49.8M Effective rate on sale price: only 6.4 %
Four 100 % legal ways to pay zero or almost zero:
- Transfer to your own limited company at adjusted cost → zero gain
- Transfer to spouse or direct bloodline → exempt
- Prove it was your primary residence for the last 2 years → fully exempt
- Sell and buy another residential property of equal/higher value within 12 months → CGT deferred until you finally sell without replacing
5. Rental Income Tax – If You Ever Rent the Property Out
Residential rent (2025):
- First Ksh 288,000 to Ksh 15M per year → exempt
- Above Ksh 15M → 7.5 % final tax on gross rent
Example: Ksh 520K/month rent = Ksh 6.24M/year Taxable = Ksh 6.24M – Ksh 288K exemption = Ksh 5.952M Tax = Ksh 446,400 per year (paid monthly via iTax)
Commercial rent: 30 % on net profit after expenses.
6. Other Smaller (But Important) Fees You’ll Meet
- Title transfer consent fee: Ksh 20K–Ksh 75K
- Official search: Ksh 500
- Valuation for bank mortgage: Ksh 35K–Ksh 95K
- Land Control Board (if land has agricultural clause): Ksh 5K–Ksh 20K
- Advocate conveyancing fees: 1–1.5 % of purchase price
Quick 2025 Reference Table – Kenyan Property Taxes at a Glance
| Tax/Fee | When Triggered | Typical Amount (Upmarket) | Who Pays | Legal Reduction Options |
|---|---|---|---|---|
| Stamp Duty | Purchase | 4 % of price | Buyer | Family transfer (0.1 %) |
| Land Rates | Every year | Ksh 350K–1.35M | Owner | None yet |
| Land Rent | Every year | Ksh 85K–480K | Owner | None |
| Capital Gains Tax | Sale | 0–15 % of gain | Seller | Company/spouse/primary residence |
| Rental Income Tax | Monthly if rented | 7.5 % above Ksh 15M/year | Owner | Keep rent below threshold |
The Bottom Line
Kenyan property taxes in 2025 are higher than they used to be, but they are predictable, transparent, and – with the right planning – often surprisingly low.
The people who get shocked are the ones who never asked the right questions at the right time.
Want the completely free 2025 Property Tax Master Calculator + the exact checklist to pay almost nothing on your next purchase or sale? Contact Realty Boris today – no sales pressure, just pure education.
