The purchase of land or property is major decision and therefore, all aspects that have a financial implication should be properly evaluated. It is important for the buyer to take into consideration all the tax implications in order to avoid instances of incompliance.
The purchaser is required to pay stamp duty on the acquisition of a property. The stamp duty is calculated at the rate of 4% of the property that is situated in urban areas while 2% applies in instances where the property is located in other areas.
The stamp duty is based on the value that is ascertained by a government valuer. This is done in order to avoid instances where the value of the property is grossly understated in order to pay less stamp duty.
The purchaser should register the Stamp Duty payment on the iTax platform in order to obtain the Payment Registration Number which should be quoted at the time of making payment. It is important to note that the payment of Stamp Duty is no longer dependent on the payment of Capital Gain Tax. Therefore a purchaser can make the payment of the stamp duty irrespective of whether Capital Gains Tax on the same transaction has been paid.
Property Boutique has a fully-fledged tax law advisory business unit that offers a vast range of tax services. Our highly qualified and experienced personnel will assist you with your tax matters and ensure that your business is tax compliant and assist you to analyze and mitigate any tax risks or exposure.
For more information and assistance on the above, please contact our tax advisory team through email at info@propertyboutique.co.ke
