Capital gains tax on Kenyan property sales: the diaspora seller guide

Kenya’s capital gains tax on property is currently 15 per cent of the gain, payable within 30 days of transfer registration. It is the single largest tax line most diaspora sellers face. The headline is simple, but the details around what is deductible, how the gain is computed, and what non-residency changes (which is less than most sellers assume) matter enough to justify getting the calculation right the first time.

The current 2026 headline

• Rate: 15 per cent on the net gain from the sale of immovable property in Kenya.
• Payable by: the seller (transferor), regardless of residency status.
• Due date: within 30 days of the transfer registration at Ardhi House.
• Filing mechanism: through the seller’s iTax account, on the standard CGT return, with supporting documentation uploaded.
• Indexation: Kenya does not currently apply indexation to the acquisition cost for CGT purposes. The gain is calculated in nominal shilling terms, which understates the real-terms cost of holding the asset.

How the gain is calculated

The gain on which CGT is charged is: gross sale proceeds, less allowable acquisition cost, less allowable incidental costs of acquisition, less allowable incidental costs of transfer, less allowable expenditure on improvements.

Sale proceeds

The headline sale price in the transfer instrument. Where the price stated in the transfer differs materially from market value, KRA can substitute its own valuation. This has become more common on high-value transactions since 2024.

Acquisition cost

The price actually paid to acquire the property, evidenced by the historical transfer instrument, historical bank statements showing the payment, and the historical stamp duty receipt. A property acquired ten or fifteen years ago with imperfect documentation is a property with a weaker CGT position. Start pulling the paperwork now, before the sale.

Incidental costs of acquisition and transfer

Legal fees, stamp duty and valuation costs incurred on both the original acquisition and the current sale. All deductible provided they are documented. Estate agent commission on the current sale is deductible; the original acquisition agent fee is deductible if it was paid by the acquirer.

Allowable improvements

Capital improvements to the property during the holding period. Not repairs, not maintenance, not redecoration. Structural additions, extensions, major renovation that changes the character or value of the property. Documented with contractor invoices, KRA-compliant receipts, and (where relevant) the approvals for the works. The most under-claimed CGT deduction in practice.

The most common diaspora CGT error is undocumented improvement expenditure. Real work that materially increased the property value, with no supporting paperwork, does not reduce the gain.

Worked example

A Kilimani apartment acquired in 2016 for KES 12m (with KES 480,000 of stamp duty and KES 240,000 of legal fees). A KES 1.8m documented kitchen and bathroom renovation in 2020. Sold in 2026 for KES 24m, with KES 720,000 of agent commission and KES 360,000 of legal fees on the sale.

• Gross proceeds: KES 24,000,000.
• Less acquisition cost: KES 12,000,000.
• Less original stamp duty: KES 480,000.
• Less original legal fees: KES 240,000.
• Less documented improvements: KES 1,800,000.
• Less sale agent commission: KES 720,000.
• Less sale legal fees: KES 360,000.

Chargeable gain: KES 8,400,000.

CGT at 15 per cent: KES 1,260,000, payable within 30 days of transfer registration.

What non-residency changes (and does not)

Kenyan CGT applies to gains from the disposal of Kenyan immovable property regardless of the seller’s residency status. Living in London, New York, Dubai or Sydney does not exempt a diaspora seller from CGT. Two things that non-residency does change:

• Filing mechanics. Non-resident sellers file through iTax on their Kenyan PIN (registration is a prerequisite to any property sale by a non-resident; if you do not have a PIN, obtain one before listing).
• Double tax treaty interaction. Where the seller is tax-resident in a jurisdiction with which Kenya has a double tax treaty (the UK, several EU jurisdictions and others), the treaty may affect the treatment of the same gain in the residence country. It generally does not exempt the Kenyan CGT charge.

The interaction between CGT and transfer registration

As a practical matter, Ardhi House will not complete transfer registration without the KRA CGT clearance (typically issued once the CGT return has been filed and the amount paid, or where a legitimate exemption applies). This means the CGT computation, the return, and the payment happen in parallel with the transfer completion, and the sale proceeds released to the seller are the proceeds net of the CGT that is settled from the escrow.

Filing the CGT return in practice

1. Reconcile the acquisition documentation. Historical transfer instrument, stamp duty receipt, legal fee receipts, improvement invoices.
2. Reconcile the sale documentation. Sale agreement, transfer instrument, agent commission invoice, legal fee invoice.
3. Complete the CGT return on iTax. Enter the gain and upload supporting documents. The system generates a payment reference slip.
4. Pay via bank transfer or mobile money. KRA acknowledges within one to three business days.
5. Obtain the KRA CGT clearance certificate. Required by the advocate to complete the transfer registration.

How Goldstay handles CGT for diaspora sellers

For every diaspora sale we compute the anticipated CGT liability during the pricing stage, so the seller knows the net proceeds before agreeing to a listing price. On completion, our tax partner files the CGT return through iTax, coordinates payment from escrow, and delivers the KRA clearance to the advocate for the transfer registration. Nothing about the CGT process should stall a well-managed diaspora sale.

Related reading: the diaspora sale playbook, the full sale cost breakdown, the MRI tax guide, and our original CGT primer.