IMPORTANCE OF PAYMENT OF STAMP DUTY IN KENYA

Stamp Duty payment is governed by the Stamp Duty Act cap 480 of the Laws of Kenya. The Act provides that every instrument specified under the Act which relates to property situated, or to any matter or thing done or to be done, in Kenya, shall be chargeable with the stamp duty.

The instrument should be duly stamped with the proper duty before the expiration of thirty (30) days after it is first executed, or after it has been first received in Kenya in case it is first executed at any place out of Kenya, if not done within the time frame it shall attract a penalty for late payment.

Instruments executed out of Kenya not being a bill of exchange or a promissory note, should prior to being used, brought into force or registered, within Kenya, be stamped according to the rate of duty chargeable and within the time frame provided for stamping. 

In the case of Transfer of property, the purchaser/buyer is responsible for payment of stamp duty. The Payment of Stamp duty is made against the value of the property as determined by the Government valuer.

The Stamp duty rate in respect of a transfer of property within a municipality is 4% while for property located outside a municipality is 2%. So where a property x is valued as kenya shillings One Million (Kshs. 1,000,000/-) and it is located within a municipality e.g Nairobi the stamp duty payment shall be 4% of 1,000,000/- which is Kshs. 40,000/-. On the other hand the stamp duty rate in respect of Charges is 0.1%.

There are instances where instruments are exempted from payment of Stamp duty being the following:

• Transfer of property to family owned Company.
• Transfer between associated companies.
• Transfer between spouses i.e husband and wife.
• Transfer in favor of any body of persons established for charitable purposes.
• Transfer by transmission etc.

In certain instances stamp duty exemption can be allowed by one making an application to the Collector of Stamp Duty attaching the necessary supporting documents, transfer, affidavit and the Legal Notice giving effect to exemption. If the application is complete and satisfactory one will be exempted from payment of stamp duty.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com