BUYER’S (PURCHASER) COSTS
- PURCHASE PRICE
- UNLESS advised otherwise by your Qualified Advocate, let a Qualified Advocate hold ALL funds [as STAKEHOLDER not AGENT, OR jointly by both parties, OR by a Third Party in an ESCROW account ] and send the money to the Seller Purchase Price ideally is to be Paid as follows.
a. Deposit of 10% (or higher) of Purchase Price on or
before execution of Sale/Lease Agreement;
b. Balance of Purchase Price on Completion (exchange
of Documents, you are given Original Title etc. to effect transfer etc.)
c. If it is a gift it should be stated clearly that it is a gift Never pay in hard cash!! Check our Vol 2. 2023
- PROFESSIONAL FEES
a. Qualified Advocate (minimum legal fees are regulated by the Advocates Remuneration Order (ARO) and are based on the value of the subject matter. There is no Agreement for KES 2,000
b. Qualified Valuer to value the Property
c. Qualified Surveyor to obtain Maps/Mutation at the Ministry (Maps cost about USD 4/KES 400) and resurvey the property
- NOMINAL DUTY TO STAMP AGREEMENT
• The Sale/Lease Agreement must be stamped for it be used in a court of law in case there is fraud
• Usually USD 20-50/KES 200-500 (expresssed in denominations of Kes 20 referred to as pound)
• The Agreement will be stamped with a red dye stamp (in Kenyan Pounds)
• Agreement must be stamped within 30 days or else Penalties will accrue
- STAMP DUTY
• 4% for properties situate within cities and municipalities
• 2% of the value for properties outside municipalities/cities
- Advocate will advise on properties exempt from Stamp Duty
4. BANK FEES & MISCELLANEOUS COSTS
- If you are taking a loan the Bank will charge the property. Charges /Mortgages attract – 0.1% of the amount secured
- Bank Miscellaneous Costs (RTGS/Excise Tax)
SELLER’S (VENDOR) COSTS
1. *LAND RENT
- payable to Government (If Leasehold)
2.* LAND RATES
- payable to the County Government
NOTE
* Inludes all Penalties payable on late payments
*SELLER to give BUYER ALL the Clearance Certificates and accompanying receipts/Bank cheques
3. UTILITY BILLS
- All pending water and Electricity Bills
* All the above costs will be apportioned between Buyer and Seller. Advocate will advise on this
4. COMMISSION
payable to duly licensed Estate Agents/Brokers
- PARTITIONING or SUBDIVISION of LAND/ BUILDING PLANS
• Costs of engaging Surveyor & Physical Planner, Qualified Engineer/Architect/Quantity Surveyor - CONSENTS/APPROVALS
All costs necessary for obtaining consents referred to in our Vol 2 (Commissioner of Lands etc, Land Control Board, Change of User, County Council Building Permits e.g)
7.PROBATE/SUCCESSION COSTS
• In case of Succession Matters, all PROBATE FEES to obtain Proper Title - CAPITAL GAINS TAX (CGT)
• Check our Vol 1; 2023
• The rate of tax is 15% of the net gain.
*Advocate will advise on how to calculate tax and properties exempt - BANK LOAN -DISCHARGE FEES
• If the Owner had taken a loan against the Property, it must be discharged with consent by Bank, Discharges/Reconveyances -0.05% of the amount secured
• Bank Miscellaneous Costs/Excise tax - VAT (@16%) ON SALE OF COMMERCIAL BUILDINGS
• On January 17,2019, KRA was granted a stay of execution on the High Court judgment (civil suit 541 of 2015 ) until the presumed appeal is heard. For now VAT on sale of commercial buildings remains payable
BUYING A HOUSE/APARTMENT + COSTS
*Note that for houses & apartments the 1st agreement is called AN OFFER LETTER, and the SALE AGREEMENT is known as AGREEMENT OF
LEASE , PURCHASE PRICE is referred to as LEASE PREMIUM
- After passage of SECTIONAL PROPERTIES ACT NO. 21 OF 2020, BUYERS/OWNERS OF
APARTMENTS will receive a TITLE DEED rather than a certificate of lease. Buyers/Owners will also have 1 share in a CORPORATION to manage the common areas
- SELLER’S LAWYER LEGAL FEES
1% of the Purchase Price
Can be renegotiated by your Qualified Advocate - DISBURSEMENT FOR WATER INFRASTRUCTURE COSTS
3.ELECTRICITY INFRASTRUCTURE COSTS
• Normally referred to as Electricity/ Power Meter & Deposit & Connection Charges
4.PROVISIONAL SERVICE CHARGE AND/OR SERVICE CHARGE
• For the first 3 to 5 months is expressed as a percentage of the Lease Premium
5.INITIAL PROVISIONAL INFRASTRUCTURE LEVY
DEPOSIT-*May not be charged
- COST OF TRANSFER OF ALLOTMENT AND SETTING UP OF MANAGEMENT CORPORATION
- VAT ON FEES AND DISBURSMENTS
• VAT is payable on legal fees and disbursments at rate of 16 % - REGISTRATION OF DOCUMENTS AND PRE/POST SEARCH COSTS
Green card search and Normal Search before and after obtaining Title, and Registration the Transfer documents to obtain New Title/Sectional Title
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