With all of the excitement surrounding the purchase of a home, it’s easy to become preoccupied with the purchase price and overlook potential additional costs. These extra charges are popularly referred to as closing costs. Stamp duty, legal fees, registration fees, consent of transfer, valuation costs, and deed search are among them.
Stamp duty
This is the tax applied on legal property documents involved in the transfer of property. In urban areas such as Nairobi, Mombasa, and Eldoret it is 4% of the value of the property while in rural areas it’s 2%.
Legal fees
A Lawyer is required during a property transaction process to conduct due diligence on the property documents before and during the transaction and ensure you as a client buy the right property. The legal fees also known as the lawyer’s fees are the money paid to a lawyer who witnesses the transaction of any property. According to the law of Kenya, it amounts to Ksh.35,000 only.
Registration fees
To cater for entry into the registry and title printing costs a client has to pay around Ksh500 to Ksh1,000.
consent of transfer
This is usually written permission of the relevant authority, the property owner, or any other interested party that okays the transaction of property. A fee of Ksh1000 is charged for Consent to Transfer from the commissioner of Lands.
Valuation Fee
Valuation is the process of analyzing the value of a property in relation to the market value. Plots within the municipal council administrative unit charge Ksh1,000 while those in urban centers, in this case, Nairobi, charge Ksh500.
Deed Search
To determine the legitimacy of your title deed you have to conduct a title search. You can do this by using the E-Citizen platform. It will cost you Ksh 500 only. Afterward, you will have to schedule a meeting with the Land Control Board which will cost you Ksh 1000.
Utility Fees
A client has to cater for some bills such as electricity, water, security fee, and garbage collection. Some real estate companies will require you to make a deposit. This depends on the real estate company.
The bottom line
When buying a home ensure you calculate all the estimated costs that we have discussed above. I hope this article was helpful. We would like to hear from you contact us at +(254) 711 08 29 29, or email us at [email protected].
