Capital Gains Tax is a seller-side tax that can arise when property in Kenya is transferred.
The headline rate is 15%, but the tax is not simply 15% of the selling price.
KRA states that Capital Gains Tax is charged at 15% of the net gain.
Who pays Capital Gains Tax?
KRA identifies the transferor, normally the seller, as the person responsible for declaring and paying the tax where it applies.
That is different from stamp duty, which is normally part of the buyer’s acquisition costs.
If you are selling, put CGT into your net-proceeds calculation before agreeing what you will do with the sale money.
What is the net gain?
KRA describes the calculation broadly as:
Net gain = net transfer value minus adjusted cost
The adjusted cost can include the acquisition cost and qualifying incidental or enhancement costs.
The tax is then charged at 15% of that net gain.
A simplified example
Suppose a property is sold for KES 10 million and the verified adjusted cost plus allowable transaction amounts produces a net gain of KES 3 million.
15% of KES 3 million is KES 450,000.
That is a simplified illustration, not a tax assessment. The correct calculation depends on the evidence and facts of the transaction.
Why records matter
A seller needs evidence to support acquisition and qualifying costs.
Useful records can include:
- the original purchase agreement
- stamp duty evidence from the acquisition
- advocate and agent invoices
- valuation or survey invoices
- receipts for qualifying improvements
- transfer costs
- other records relevant to the adjusted cost
If you bought the property years ago and kept no records, calculating the gain becomes harder.
When is CGT triggered?
KRA states that the tax point is when the transfer is registered in favour of the transferee.
A property sale therefore has both legal-transfer and tax steps that need to line up at completion.
CGT vs stamp duty
These taxes are commonly confused.
Capital Gains Tax: tax on the seller’s net gain where applicable.
Stamp duty: tax on the instrument used for the transfer, normally budgeted by the buyer.
Read our stamp duty guide if you are calculating the buyer’s side of the deal.
Are there exemptions?
Kenyan tax law contains exemptions and special cases.
Do not assume that a family transfer, inheritance, company restructuring or other non-standard transaction is taxed exactly like an ordinary arm’s-length sale.
Use the current KRA Capital Gains Tax guidance and professional tax or legal advice for the specific transaction.
Selling price is not the same as cash you keep
Before accepting an offer, a seller should estimate:
- any CGT due
- advocate’s fees
- agent commission where applicable
- discharge costs if the property is charged
- outstanding rates or rent
- other completion costs
A KES 10 million offer does not mean KES 10 million reaches your bank account.
Do the calculation before completion
The easiest time to understand the tax is before the sale agreement is signed.
Gather the acquisition records, estimate the gain and ask your tax adviser or advocate what evidence will be required.
That gives you a realistic view of the sale proceeds and avoids a tax surprise when the transfer is ready to register.
