How the gain on a property sale is taxed
CGT is charged under the Income Tax Act on gains from transferring property situated in Kenya, including land and buildings.
How the gain is worked out. The net gain is the transfer value minus incidental costs of selling, minus the adjusted cost. The adjusted cost is what the seller paid, plus the costs of buying and the cost of improvements. Keep receipts for the purchase, legal fees, stamp duty and building work: they reduce the gain.
The rate. The Finance Act 2022 raised the rate with effect from 1 January 2023 (see the figures box). Some articles wrongly credit the change to the Finance Act 2023. The 2023 Act did something different: from 1 July 2023 it extended CGT to sales of shares in companies that draw most of their value from Kenyan land. CGT is a final tax, so it is not added to the seller's other income.
When it is due. The tax falls due around completion, but reputable sources differ on the exact trigger (see the Sources differ box). The seller files and pays through KRA's iTax.
Exemptions. KRA publishes the transfers that are exempt, which include certain transfers within families and transfers of a home the seller has lived in. The conditions are strict, so check KRA's current list and take advice before relying on one.
What to check
- Gather proof of what you paid and what you spent on the property; it lowers the gain.
- Check whether an exemption applies, using KRA's current list.
- File and pay before registration of the transfer, and keep the receipt.
- If you are buying from a company, ask how the seller is handling CGT.
Risks to know
- Advice that the rate changed under the Finance Act 2023: it was the Finance Act 2022.
- A sale agreement that makes the buyer responsible for the seller's CGT without saying so clearly.
- Declaring a lower price to cut CGT: the registry and KRA use valuations too.
Typical cost or timeline
Capital gains tax rate (from 1 January 2023)
15 % of the net gain
As of October 2026
Kenya Revenue Authority EY Global Tax News Kenya Revenue Authority
Capital gains tax rate before 1 January 2023
5 % of the net gain
As of October 2026
Sources differ
SOURCE 1
KRA guidance says capital gains tax falls due when the transfer is registered.
accessed 2026-10-13
SOURCE 2
A law firm reads the Finance Act 2023 as making it due by the earlier of full payment of the price or registration of the transfer.
12 September 2024
Capital gains tax vs Stamp duty
| Aspect | Capital gains tax | Stamp duty |
|---|---|---|
| Who pays | The seller | The buyer |
| Charged on | The net gain | The higher of price and government value |
| Paid to | Kenya Revenue Authority | Ministry of Lands |
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Questions
What is the capital gains tax rate in Kenya?
See the figures box. The current rate has applied since 1 January 2023.
How do I calculate capital gains tax on land in Kenya?
Take the sale value, subtract selling costs, then subtract what you paid plus buying costs and improvements. The rate applies to what is left.
Who pays capital gains tax, the buyer or the seller?
The seller.
Which law raised capital gains tax in Kenya?
The Finance Act 2022, with effect from 1 January 2023.
Is there capital gains tax on inherited land?
Passing land from an estate to beneficiaries is treated differently from a sale. Check KRA's exemption list and take advice.
Related terms
Sources
- 1. Capital Gains Tax Kenya Revenue Authority · checked 13 October 2026
- 2. Capital Gains Tax FAQs 2023 Kenya Revenue Authority · checked 13 October 2026
- 3. Kenya enacts Finance Act 2022 EY Global Tax News · checked 13 October 2026
- 4. Tax and exchange control alert: capital gains tax in real estate (12 September 2024) Cliffe Dekker Hofmeyr · checked 13 October 2026
Cite this definition
"Capital gains tax", Kenya Property Centre Property Glossary, last checked 13 October 2026, https://kenyapropertycentre.com/glossary/capital-gains-tax
You may reuse this definition under CC BY 4.0 with credit to Kenya Property Centre and a link to this page.
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