Closing Cost When Purchasing Land

When purchasing land, there are additional costs over and above the purchase price of the land that first time buyers may be oblivious to. Although this costs apply to most land purchases,Ricco Homes and Developers Limited absorbs some of these costs for individuals who opt to purchased land through them in their selling price hence, covering their buyers from the hustle of paying for the overhead costs associated with purchasing land such as legal fees and Land control Board Fees and stamp duty fees.

Let’s take a detailed look at the costs associated with purchasing land in Kenya apart from the cost of the land itself.

REAL ESTATE AGENT FEES

Working with an agent comes with a lot of advantages but at a cost. Agents charge a fee for their services that is often billed to both the seller and buyer that ranges from 2-5% of the price of the land or sometimes higher as the parties agree.

LEGAL FEES

In Kenya, for a land transaction to be complete, a lawyer must be present. Lawyers in Kenya are governed by the Advocates Remuneration Order which controls the fees charged by all lawyers to any client. A buyer is advised to budget for 1-2% of the purchase price for the legal fees which includes conducting due diligence on the land,before and during the transaction, preparation of the Agreement and Transfer documents to be executed by the seller and buyer then stamped by the lawyer.

SEARCH FEES

A search is conducted in the lands office in the region where the land is located to ensure the property is registered under the real owner and dig through the previous owners of the property. Some buyers opt to conduct the search of the land from the lands office independently. In Kenya, a search through the eCitizen platform costs ksh.500.

SURVEY FEES

Land surveys are professional drawings that outline the exact boundaries of a property, as well as the dimensions and location of land. There are different types of surveys that can be conducted on land one wishes to purchase such as the boundary survey and elevation or topography survey. A majority of buyers opt to use a surveyor of their choice to confirm the boundaries of the land are as set. The prices vary depending on the type of survey being conducted and size of land being surveyed.

LAND CONTROL BOARD FEES

The buyer and sometimes this cost falls on the seller’s side, is required to book a meeting with the assistant county commissioner and village elders from the location of the property. The meeting happens once a month on a pre-set date and will cost between kes.1000-2000 depending on the region. One can opt not to wait for the set date and go for the Special Board that occurs more often. The charges for this range between kes.5,000-15,000 depending on the location of the land in question.

STAMP DUTY FEES

After the sale is completed, the lawyer will be required to present the sale agreement to the land office for stamping of duty.

• The amount charged is based on the location and the price of the property.
• 4% of the purchase price is the stamp duty payable for land in an Urban area and 2% for land in rural areas.
• There is also Capital gains tax that should be accounted for. This is usually charged 4% of the net gain value on land whose selling price is or above kes.3,000,000.

The best part of buying land through a company like Ricco Homes & Developers Limited, is it covers 90% of the costs and you don’t have to worry about the additional costs.

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