15% CGT on the net gain after acquisition and allowable costs.
CGT due
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Net taxable gain
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Net after CGT
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Your breakdown
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Item
Amount (KES)
Worked example
Suppose you sell a plot of land for KES 10,000,000. You bought it for KES 6,000,000 and you have KES 400,000 of allowable costs, such as legal fees, valuation and improvements. The net gain is the sale price less the acquisition cost less allowable costs, which is KES 3,600,000. Capital Gains Tax is a flat 15% of that net gain, so the CGT due is KES 540,000.
After paying KES 540,000 in CGT you keep KES 9,460,000 of the sale proceeds. The tax is only 5.4% of the headline price here, because it falls on the gain and not on the whole sale value. The chart shows the gain split into CGT and the gain you keep.
How it is calculated
Capital Gains Tax in Kenya is charged at a flat 15% on the net gain from transferring land, buildings or unquoted shares. The rate rose from 5% to 15% with effect from 1 January 2023. The net gain is the transfer value less the adjusted cost, which combines the original acquisition cost with allowable expenditure such as improvements, professional fees and the cost of the transfer. If the result is nil or a loss, no CGT is due. The tax is payable on or before the transfer of the asset, and it is a final tax on that gain rather than something added to your income tax. One important exemption is that securities listed on the Nairobi Securities Exchange are not subject to CGT, so this tool applies to land, buildings and unquoted shares. Keep records of purchase price and costs, because they directly reduce the taxable gain.
Frequently asked questions
How much is capital gains tax in Kenya?
CGT is 15% of the net gain, which is the sale price less the acquisition cost and allowable costs such as improvements and transfer fees. The tax is due on or before transfer of the asset. Shares listed on the Nairobi Securities Exchange are exempt from CGT, but land, buildings, and unquoted shares are chargeable.
When did Kenya increase the CGT rate to 15%?
Kenya raised the Capital Gains Tax rate from 5% to 15% with effect from 1 January 2023 under the Finance Act 2022. Before that date the rate had been 5% since CGT was reintroduced in 2015 after a long suspension. If you transferred an asset before 1 January 2023 the old 5% rate applied.
What costs can be deducted before calculating CGT in Kenya?
The Kenya Revenue Authority allows you to deduct the original acquisition cost of the asset plus any allowable incidental costs. Allowable costs include capital improvements to the property, legal and professional fees paid for the transfer, valuation fees required by the transaction, and stamp duty or registration charges. Routine repairs and maintenance are not allowable because they are revenue rather than capital expenditure.
How and when is Kenyan CGT paid to KRA?
CGT is a final tax that must be paid on or before the date of transfer of the asset. The seller files a CGT return on the KRA iTax portal and pays before completing the conveyancing or share transfer process. Failure to pay before transfer attracts penalties and interest. The tax is separate from income tax and is not included in your annual personal tax return.