Buying property in Kenya has been accustomed
to many myths and assumptions. As it is the case with many African countries, a
good share of foreign investors looking to invest in real estate in Kenya has
their own doubts. The process of buying property in Kenya cannot be said to be
one of the easiest yet based on the opportunities at stake, it is worth the go.
So what can you expect should you decide to venture in the Kenyan property
market?
Foreigners looking for investment opportunities
abroad can buy ‘commercial class’ land in Kenya for income or revenue-making
purposes. According to local land laws, Foreigners are allowed to acquire this
and build on it. However Agricultural
land or farm lands cannot be acquired by foreign individuals. ‘Agricultural
land’ is usually owned by indigenous people. If purchase is made through a
company – the majority of which must be Kenyan-owned – then it is allowed. The
land will be bought under the company’s name.
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There are freehold and leasehold types of
land. Mostly, land in Kenya is government-owned. This can be leased for 50 to
99 years. The first step to purchasing property in Kenya is to hire a real
estate lawyer. A title search on the property is very important as many areas
are not registered. Once property has been chosen and a price is agreed upon,
the lawyer prepares a sale agreement as a conditional preliminary contract,
signed by both parties. Upon execution, the buyer pays a deposit of 10% to 30%
of the purchase price, which is usually refundable if the seller defaults on
the transaction.
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Closing is usually within 90 days from
signing. During this time, the seller must obtain a clearance certificate from
the municipality. This is presented to the buyer to ensure that all local taxes
and utility bills have been settled. The lawyer then files a Draft Transfer at
the Lands Office and the stamp duty is paid. An official from the Ministry of
Lands will come to inspect the property, verify its condition, and make sure
that the sale price is in accordance with its actual value. These steps will
take approximately two to four weeks to complete.
The lawyer submits the documents to the Lands
Office to be able to register the transfer, including the original title held
by the seller, clearance certificates, consent transfer and the form for
valuation for stamp duty. At the same time, the buyer settles the remaining
balance with the vendor. Taxes and lawyer fees is paid within 30 days from
closing.
It is possible to purchase in Kenya without
being in the country. One can assign a lawyer to go through the whole process
on the buyer’s behalf through a power of attorney. please visit www.buypropertykenya.com
Reference: globalpropertyguide.com
