The Shift
As the Finance Bill 2025 enactment nears (1 July 2025), real estate players – developers, vendors and purchasers must gear up for a new tax landscape. We have been monitoring closely how these changes will affect every property deal, will be taxed, transferred and structured.
The Bill brings significant shifts with clearer definitions and expanded tax terms, changes affecting Capital Gains Tax ( CGT), rental income, loss of developers’ incentives and Stamp Duty exemptions
As our Firm is uniquely positioned at the intersection of tax strategy, conveyancing and estate planning, we aim to equip our clients with a clear, forward-looking view of the proposed changes.
What is at stake for key real estate players
Stakeholder | Key opportunities | Shifts/ Risks |
Developer |
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Vendors |
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Landlords and/or Property Owners |
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First-time Purchasers under the Affordable Housing Programme |
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SEZ Players |
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Educators /Edupreneur |
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Additional Highlights, explained.
- CGT Exemptions: exemption of Capital Gains on a company where the spouse or immediate family holds 100% of the shareholding, for transfers between spouses, separated and divorced and immediate family and transfers in public interest.
- KRA property Lien: The Bill empowers the Commissioner to notify the Registrar to register a taxpayer’s property as security for unpaid taxes. This registration acts as a legal restriction, preventing the sale or transfer of the property until the tax debt is settled.
- Companies & CGT: Clarification of a Capital Gain Tax in relation to a Company, including members clubs and trade associations
- Exemption of Stamp Duty: on property transferred as part of internal reorganisation
- Exemption of Stamp Duty Payment for first-time purchasers under an affordable housing scheme: The transfer of a property, under the affordable housing scheme, from a developer, National Housing Corporation, other Government Agencies or Special Purposes Vehicles to Purchasers is exempt from Stamp Duty. This is specifically available for first-time purchases
- Rental Income Tax: The Bill provides that rental income tax will be capped at 7.5% of the gross rental receipts of a taxable person. The landlord/ property manager is responsible for payment of the tax within five (5) working days after deduction.
We’re engaging closely with clients and helping them to unpack the implications and prepare accordingly, before the proposed changes come into operation.
Authors:
Waithira Mugo – Commercial & Tax Lawyer
Valentine Magato – Real Estate & Conveyance Lawyer
Contact us: info@wmcoadvocates.co.ke
Disclaimer –This Article is in general terms for guidance only and is not intended to substitute professional advice. While due diligence has been undertaken, in ensuring the accuracy of information provided herein, Waithira M. & Co. Advocates is not responsible for any actions, omissions undertaken as a result of the same.
