If you are selling a plot at home, capital gains tax on land in Kenya is the bill your advocate will ask about before the transfer goes in. The rate is 15% of the net gain. The seller pays it, wherever the seller lives. What most people get wrong is the gain itself: which costs come off it, which receipts you need to prove them, and which transfers are not taxed at all.
We worked from the Income Tax Act as revised to 1 July 2026 and KRA's own CGT page. Where the law is clear, we quote the paragraph. Where it is not, we say so.
The basics of capital gains tax on land in Kenya
- Rate. Paragraph 14 of the Third Schedule sets the rate at 15%, and it is a final tax. (Income Tax Act, Cap. 470)
- Since when. The Finance Act 2022 raised the rate from 5% to 15% with effect from 1 January 2023. (Afriwise, January 2023)
- Who pays. KRA says CGT is declared and paid by the transferor, meaning the seller. (KRA, Capital Gains Tax)
- When it is due. Paragraph 11A of the Eighth Schedule says the earlier of the seller receiving the full purchase price or registration of the transfer.
- How to pay. KRA says you start the payment on iTax, get a payment slip, and pay at a KRA appointed bank. The slip expires after 30 days.
KRA reports nothing on penalties on that page, so we will not guess at them here.
How the gain is worked out
The formula on KRA's page is short:
Net gain = (transfer value minus incidental costs of the transfer) minus adjusted cost
Each term has a meaning in the Eighth Schedule.
Transfer value
This is normally the price you are paid (paragraph 7). If the deal is not at arm's length, is a gift, or is between related people, paragraph 9 replaces the price with market value. Selling to a cousin at a "family price" does not lower the tax.
Incidental costs of the transfer
Paragraph 10 lists what comes off the sale side: fees for a surveyor, valuer, accountant, agent or legal adviser, costs of transfer, advertising to find a buyer, and valuation costs. Keep the agent's invoice and your advocate's fee note.
Adjusted cost
Paragraph 8 builds this from four parts:
- what you paid to acquire or build the property
- money spent to enhance or preserve its value
- money spent establishing, preserving or defending your title
- the incidental costs when you bought it, which paragraph 10 says include stamp duty
Point 3 is easy to miss. Advocate's fees for a boundary case or for lifting a caution on your title can go into your cost.
Worked examples
These numbers are made up to show the arithmetic. They are not market prices and not KRA figures.
Example 1: a plot bought in 2018 and sold in 2026
You bought a plot for KES 2,000,000. Stamp duty and legal fees at purchase came to KES 120,000. You later fenced it for KES 300,000. In 2026 you sell for KES 5,500,000 and pay KES 250,000 in agent, legal and valuation fees.
- Transfer value less incidental costs: 5,500,000 minus 250,000 = KES 5,250,000
- Adjusted cost: 2,000,000 + 120,000 + 300,000 = KES 2,420,000
- Net gain: 5,250,000 minus 2,420,000 = KES 2,830,000
- CGT at 15%: KES 424,500
Example 2: the same plot, but the fencing receipts are lost
If you cannot prove the fence or the purchase costs, your adjusted cost may fall to the KES 2,000,000 price alone. The gain becomes KES 3,250,000 and the tax KES 487,500. That is KES 63,000 more, caused by missing paper.
Owners abroad are exposed here. If a relative paid the fundi in cash and nobody kept a receipt, the cost is hard to prove. Ask whoever handles money on site for written receipts with dates, and store scans yourself.
Example 3: a small rural sale
Paragraph 36(d) of the First Schedule exempts the gain on land transferred by an individual where the transfer value is not more than KES 3 million. It also exempts agricultural property of under 50 acres that sits outside a municipality, gazetted township or declared urban area. A KES 2,800,000 sale by an individual would fall under the first test. Whether a parcel sits outside an urban area is for your advocate and the county to confirm.
Transfers that are not taxed
Paragraph 6(2) of the Eighth Schedule says certain transfers are not transfers for CGT at all. The ones families ask about most:
- between spouses, and between former spouses under a divorce settlement or genuine separation agreement
- to immediate family, which paragraph 6(3) defines as "children of the spouses or former spouses"
- to a company where an individual, spouses, or a spouse and immediate family hold 100% of the shares
- from a personal representative to a beneficiary while an estate is administered
- transfers made only to secure a loan, and the return of that security
Notice what the definition leaves out. A gift of land to your brother, sister, niece or parent is not a transfer to "immediate family" under that wording. Gifts count as transfers, and paragraph 9 then uses market value. Our post on transferring land as a gift in Kenya covers the registry side of that.
There is also a five year rule worth knowing. Paragraph 8(4A) says that if land passes in a transfer not subject to CGT, and is then sold in a taxable transfer within five years, the adjusted cost is the original owner's cost. So if a parent gives a plot to a child who sells it two years later, the gain runs from what the parent paid.
The Finance Act 2026 also added an exemption for property transferred into a registered REIT (First Schedule, item 76). It rarely touches a family plot.
The private residence exemption, and why it is tricky from abroad
Paragraph 36(c) exempts the gain on a private residence if the owner occupied it continuously for the three years before the transfer. Temporary absence is ignored. Land used for business or to earn income is not covered, and you can only claim one residence at a time.
The Act does not define how long an absence can be and still be "temporary." If you moved to Dallas or Doha in 2021 and have rented the house out since, it is hard to see that as your private residence. If it sat empty and you came home every December, the answer is less obvious. We are not going to guess. Put the facts to an advocate or tax adviser before you rely on it.
Timing, and a court ruling worth knowing
Business Daily reported in August 2026 that combined CGT and stamp duty receipts rose 28% to KES 26.8 billion in the year to June 2026. The same report said a High Court ruling of 31 July 2025 held that CGT becomes due when property is sold and paid for, not when the Lands Registry approves the transfer. (Business Daily, 19 August 2026)
In practice your buyer's advocate will want to see the CGT paid before they release the last of the money or lodge the transfer. If you live abroad, agree in the sale agreement that your advocate pays the CGT from the proceeds they hold, so you are not wiring money home to cover a tax on money you have not yet received. Our guide to the buying land in Kenya process shows where this step sits in a sale.
What to gather before you list a plot
- The original sale agreement and proof of what you paid
- The stamp duty receipt and your advocate's fee note from the purchase
- Receipts for fencing, building, surveys and any title disputes
- Your KRA PIN and iTax login, which you will need to file from abroad
- A current official search, so the buyer's checks do not stall
If you are unsure whether the price you are being offered is in line with the area, Karibu shows asking prices near the plot on the online pricing index. They are asking prices, not sale prices, so treat them as a guide. You can also book a call if a sale is already moving.
Find the receipts now, while the people who issued them are still easy to reach.
Sources: Income Tax Act, Cap. 470, as at 1 July 2026 (Kenya Law revision hosted by KRA), Eighth Schedule paragraphs 6 to 11A, First Schedule paragraphs 36 and 76, Third Schedule paragraph 14. KRA, Capital Gains Tax. Afriwise, Capital Gains Tax Increase, January 2023. Business Daily, 19 August 2026. This article is general information, not legal or financial advice.