Calculate your Capital Gains Tax on the transfer of property, shares, and other assets in Kenya. The rate increased from 5% to 15% effective January 2023.
Capital Gains Tax in Kenya was reintroduced on 1 January 2015 after being suspended since 1985. Initially set at 5%, the rate was tripled to 15% effective 1 January 2023 through the Finance Act 2022. This significant increase has had a major impact on property and investment transactions across the country.
CGT applies to the "net gain" realized from the transfer of property situated in Kenya, whether by residents or non-residents. The net gain is calculated as the transfer value (or market value if higher, in certain cases) minus the adjusted cost. The adjusted cost includes the original acquisition cost, expenditure on improvements, and incidental costs of both acquisition and disposal such as legal fees, valuation fees, and agent commissions.
For assets acquired before 1 January 2015, when CGT was suspended, the cost base is deemed to be the market value of the asset as at that date. This prevents taxation of gains that accrued during the period CGT was not in effect. However, proving the 2015 market value can be challenging, so it's advisable to obtain and retain professional valuations.
One of the most notable exemptions is for listed shares traded on the Nairobi Securities Exchange (NSE). Gains from disposing of listed securities remain exempt from CGT — a policy designed to encourage participation in the stock market. However, gains from unlisted or private company shares are fully subject to the 15% rate.
Property transactions are where most Kenyans encounter CGT. Before a land transfer can be registered, the seller must obtain a CGT clearance certificate from KRA through the iTax system. The tax must be paid within 30 days of the transfer, and failure to comply can result in penalties of up to 20% of the tax due plus interest at 1% per month.
Kenya's Capital Gains Tax rate is 15%, effective from 1 January 2023. Before that, the rate was 5% (from 2015-2022). CGT applies to gains from the transfer of property situated in Kenya.
Listed shares traded on the Nairobi Securities Exchange (NSE) are exempt from CGT. However, unlisted shares and shares in private companies are subject to the 15% CGT rate on any gains realized.
Yes. You can deduct the original acquisition cost, expenditure on improvements to the asset, and incidental costs of both acquisition and disposal (legal fees, agent commissions, valuation fees, etc.).
No. Transfers on death (inheritance) are exempt from CGT. However, when the beneficiary later sells the inherited property, CGT will apply based on the cost to the deceased person or the market value at the date of death.