Wait What

You've saved for years. You've found the property. You've agreed on a price. And then, somewhere between the handshake and the title transfer, an extra KES 800,000 appears; and nobody warned you it was coming.

This is the most common financial shock in Kenyan property. Not a scam. Not fraud. Just the yawning gap between what a property is listed for and what it actually costs to make it legally, fully yours. First-time buyers routinely discover they are 8% to 15% short of what they actually need; after they've already committed emotionally and sometimes contractually. This article exists because that gap deserves a line-by-line explanation before you sign anything.

Start here: the listed price is not the purchase price

In Kenya, the listed price is the number a seller or developer wants for the property itself. It does not include the taxes, professional fees, government levies, and third-party costs that the law and the transaction process require you to pay on top of it. These are not optional. They are not negotiable with the seller. They are yours to carry; and they add up faster than most buyers expect.

The honest number to work with before you begin seriously viewing property is this: Listed Price × 1.12 to 1.15 = your true minimum budget. On a KES 10 million property, that means you need KES 11.2M to KES 11.5M liquid before a single renovation, piece of furniture, or utility connection.

Here is exactly where that money goes.

Stamp duty: the biggest surprise, and it's non-negotiable

Stamp duty is a government tax on the transfer of property. In Kenya, it is calculated on the higher of the market value or the purchase price; whichever is greater. The Kenya Revenue Authority(KRA) uses its own valuation, which may differ from what you agreed with the seller.

The current rates are(Please clarify):

4% of property value for properties within municipalities (Nairobi, Mombasa, Kisumu, and other urban areas)
2% of property value for properties outside municipalities

On a KES 10 million Nairobi apartment, stamp duty alone is KES 400,000 — payable before transfer can proceed. This is a cash cost. You cannot mortgage it. It must come from your own pocket at the point of transfer, which typically comes months after you've already committed to the purchase.

The mechanism that catches buyers off guard: if KRA's valuation of the property is higher than the agreed purchase price, you pay stamp duty on KRA's number, not yours. This is particularly common in rapidly appreciating suburbs where transaction prices lag behind assessed values. Budget for it.

Legal fees: yours and, indirectly, theirs

You will pay your own advocate. You may also; through a less visible mechanism; effectively contribute to the developer's or seller's legal costs through how the transaction is structured.

Your independent advocate's fees for a property transaction in Kenya typically run between 1% and 1.5% of the purchase price, subject to the Advocates Remuneration Order which sets minimum scales. On KES 10M, that's KES 100,000 to KES 150,000. This covers title search, review of the sale agreement, conducting due diligence, handling the transfer documents, and registering the title in your name.

Do not use the developer's recommended advocate. The structural conflict of interest in that arrangement is real, and the cost of discovering it after signing is far higher than the cost of hiring your own counsel before.

Some developers also charge a documentation or legal processing fee of approx. KES 30,000–100,000 on their side of the transaction. Read your sale agreement carefully for this line item; it is easy to miss in a long document and often presented as standard.

Valuation fees: required by your bank, paid by you

If you are financing the purchase through a mortgage, your bank will not lend against a property it has not independently valued. The valuation must be conducted by a registered valuer approved by the bank; not one you choose yourself.

Valuation fees in Kenya are regulated by the Institution of Surveyors of Kenya(ISK) and typically range from KES 15,000 to KES 50,000 for residential property, depending on the value and complexity of the asset. Commercial and mixed-use properties run higher.

You pay this fee at the point of mortgage application, before the bank commits to lending you anything. If the valuation comes in below the purchase price; which happens, particularly in overheated micromarkets — the bank will lend against the lower figure, and you must fund the difference in cash. This is called a valuation gap, and it has derailed more purchases than most buyers realise.

Bank charges: the mortgage is not free to set up

A mortgage comes with its own cost structure, separate from the interest rate your relationship manager quoted you.

Facility/arrangement fee: typically 1–2% of the loan amount, charged upfront. On a KES 7M mortgage, that's KES 70,000–140,000.
Insurance: banks require both property insurance (fire and perils) and mortgage protection insurance (life cover that clears the loan on death). Combined, these run KES 20,000–60,000 annually and are often capitalised into the loan.
Negotiation fee: some lenders charge a separate fee for processing and approving the mortgage application — typically KES 5,000–20,000.

These charges vary between institutions. Equity Bank, KCB, Stanbic, NCBA, and Co-op Bank all have different fee structures. Shop the total cost of the mortgage — not just the headline interest rate — before committing to a lender.

Agent commission: who pays, and how much

In Kenya, real estate agent commission is typically 3 to 5% of the sale price, and in most transactions it is paid by the seller. However, this has a direct effect on the price you pay: sellers price commission into their asking price, meaning you are effectively funding it through the purchase price even when you don't write the cheque.

Where buyers do pay agent fees directly; particularly in rental-to-purchase arrangements or buyer's agent agreements; the rate is usually 2.5–3%. Always clarify in writing who is paying the agent and how much, before any offer is tabled.

For new developments, developers typically bake a marketing and sales commission of 5–8% into their pricing structure. This is a cost of doing business that is passed to the buyer through the unit price. It is not illegal. It is also not disclosed on the brochure.

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Search and registration fees: small, but real

Several smaller government and administrative fees accumulate through the transaction:

Land search fee: KES 500–2,000 per search at the Lands Registry. Your advocate will conduct multiple searches through the process.
Title registration fee: varies by county and transaction value, but typically KES 5,000–20,000.
Consent to transfer (for leasehold land): if the property sits on government leasehold land — which covers a significant portion of Nairobi — you need consent from the National Land Commission to transfer. This process can take 4–12 weeks and costs KES 1,000–5,000 in fees, plus your advocate's time.
Capital Gains Tax: payable by the seller at 15% of the gain, but worth understanding as a buyer — sellers sometimes attempt to negotiate this cost into the purchase price or factor it into their asking price from the outset.

The off-plan surcharge: VAT and what it means for you

If you are buying off-plan from a developer; which is the dominant purchase model for mid-market buyers in Nairobi — Value Added Tax applies differently depending on the developer's structure.

Developers who are VAT-registered charge 16% VAT on their professional services and, in some structures, on portions of the construction cost. For end buyers, this can manifest as a 10–16% premium over an equivalent resale property. Not all developers handle this the same way — some absorb it, some pass it on, and some structures are complex enough that your advocate needs to review them before you can accurately assess the true cost.

Always ask: "Is VAT included in the quoted price, or is it additional?" Get the answer in writing.

What the real number looks like

Here is a realistic cost breakdown for a KES 10 million apartment in Nairobi, financed with a KES 7 million mortgage:

Purchase price: KES 10,000,000
Stamp duty (4%): KES 400,000
Your advocate's fees (1.25%): KES 125,000
Bank arrangement fee (1.5% of loan): KES 105,000
Valuation fee: KES 30,000
Insurance (first year): KES 40,000
Lands Registry and search fees: KES 25,000
NLC consent (if leasehold): KES 10,000
Total acquisition cost: KES 10,735,000

Your KES 10 million purchase required KES 735,000 you hadn't budgeted for — before moving costs, any renovation, or the first service charge payment. This is not an edge case. This is the standard transaction.

How to protect yourself before you commit

Three things every first-time buyer should do before signing any agreement:

Build a full cost model, not just a purchase price budget. Use the 12–15% buffer as your working assumption until you have exact figures from your advocate and lender.
Instruct your own advocate before viewing seriously. A good advocate will flag cost issues, title problems, and contractual traps before you're emotionally committed to a property. After that point, buyers routinely ignore advice they'd have acted on earlier.
Request a mortgage pre-approval with a full fee schedule from at least two lenders before you make an offer. You need to know your bank's all-in cost, not just their interest rate.

The property market in Kenya is not designed to make these costs obvious. It is designed to make you fall in love with the property first and discover the costs second. Reversing that order is the most valuable thing you can do as a buyer.

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