Effective November 27, 2023, the Ministry of Lands will take over the collection of stamp duty for land transactions, marking the second significant shift in revenue collection responsibilities within four months for the Kenya Revenue Authority (KRA).
This transition follows a joint public notice issued by the KRA and the Lands Ministry, aiming to streamline the payment process for stamp duty on land transactions.
The public notice states, “In order to make the payment of stamp duty for land transactions a seamless process, the Kenya Revenue Authority has now made it possible for the public to make payments at the State Department for Lands and Physical Planning.”
According to the notice, the payments can be made through the e-Citizen platform, utilizing pay bill number 222222. Detailed payment instructions are available on the Ardhisasa platform.
This development aligns with the government's broader initiative to consolidate revenue collection through a single-pay bill.
Notably, this change follows the KRA's recent loss of the mandate for collecting aviation fees.
As of the present, stamp duty rates stand at four per cent of the property value for urban lands and two per cent for rural lands, payable at the commissioner for domestic taxes.
The process of transferring land underwent modifications in October 2016 when simultaneous payments for stamp duty and Capital Gains Tax were required on the i-Tax portal.
However, the KRA discontinued this requirement in 2020, eliminating the need for a Capital Gains Acknowledgement slip before stamp duty payment.
The government's projected stamp duty collection for the current financial year ending June 2024 is Sh9.53 billion, with expectations of a significant increase to Sh19.8 billion in the subsequent Financial Year starting July.
President William Ruto's announcement last year to exempt first-time home buyers from paying stamp duty reflects an initiative to alleviate house ownership costs for workers facing the challenges of a rising cost of living.
Ruto emphasized his administration's strategy to strike a revenue balance by waiving stamp duty for first-time homebuyers while reinforcing compliance with other property-related levies such as land rates and rent.
The existing exemption from stamp duty applies to first-time homebuyers of approved affordable housing units, a policy introduced during the previous administration of former President Uhuru Kenyatta.
Additionally, exemptions from stamp duty include transfers to charitable organizations as gifts, property transfers between spouses, and transfers to family members in case of the demise of the registered property owner.