Seamless and Stress-free Process for Foreign Real Estate Investors

Foreigners (non-Kenyans) can buy real estate in Kenya, but there are specific legal requirements and restrictions. Below is a detailed guide on the rules and processes for foreigners purchasing property in Kenya:

1. Types of Property Foreigners Can Own

• Freehold Land: Foreigners can buy freehold property (full ownership) except agricultural land.
• Leasehold Land: Foreigners can purchase leasehold property (usually 99 years), including apartments, commercial buildings, and some residential plots.
• Restrictions:
  • Agricultural Land: Foreigners cannot own freehold agricultural land but can lease it for up to 99 years (with government approval).
  • Community Land: Foreigners cannot buy community land unless granted special permission.

2. Legal Requirements for Foreign Buyers

To purchase property in Kenya, foreigners must provide:

• Valid Passport (must be notarized if buying remotely).
• Kenya Revenue Authority (KRA) PIN Certificate (obtainable online via KRA iTax).
• Proof of Funds (bank statements, sale agreements, or income documents to show legitimate sources).
• Foreign Investment Approval (for large investments, may require approval from the Investment Authority).

3. Due Diligence & Verification

Foreign buyers must conduct thorough checks before purchasing:

• Title Deed Verification (via Ardhisasa or Ministry of Lands).
• Land Search (to confirm ownership, encumbrances, and disputes).
• Survey & Mapping (ensure correct boundaries).
• Legal Review (hire a Kenyan property lawyer to check contracts).

4. Tax & Fees for Foreign Buyers

• Stamp Duty: 4% of property value (higher than the 2% for Kenyan citizens).
• Capital Gains Tax (CGT): 15% on profits if the property is later sold.
• Rental Income Tax: 10% withholding tax on rental income (if leasing out).
• Legal & Agency Fees: Typically 1-2% of property value.

5. Financing Options for Foreigners

• Cash Purchase: Most straightforward method.
• Mortgage: Few Kenyan banks offer mortgages to foreigners (Absa, Stanbic, and KCB may consider with strict conditions).
• Offshore Financing: Some foreign banks provide loans for property purchases in Kenya.

6. Restrictions & Key Considerations

• Leasehold Limits: Foreigners cannot own land indefinitely; maximum lease is 99 years (renewable).
• Government Approval Needed for certain purchases (e.g., large-scale investments).
• No Ownership of Agricultural Land (only leasehold allowed).
• Repatriation of Funds: Foreigners can sell and repatriate profits but must provide proof of original investment.

7. Recommended Professionals

• Real Estate Agent (registered with RERA – Real Estate Regulatory Authority).
• Property Lawyer (specializing in Kenyan land law).
• Tax Consultant (for compliance with Kenyan tax laws).

8. Step-by-Step Buying Process

1. Identify Property (via agents, developers, or private sales).
2. Conduct Due Diligence (title search, survey, legal checks).
3. Negotiate & Sign Sale Agreement (with lawyer’s help).
4. Pay Stamp Duty & Transfer Fees.
5. Complete Transfer at Ministry of Lands.
6. Register New Ownership (updated in Ardhisasa system).

Key Tips for Foreign Buyers

✅ Avoid buying land without a physical visit (or send a trusted representative).
✅ Always use a lawyer to verify documents and handle transactions.
✅ Beware of fraud (fake titles, double-selling, unregistered agents).
✅ Check zoning laws (some areas restrict foreign ownership).

For the latest regulations, consult Greenlight Real Estate Ltd and will guide you every step of the way.