Thursday, 1 December 2011



Purchase of property/land in Kenya is subject to costs such as valuation costs, costs for obtaining various consents depending on the location of the property and registration regime, registration costs, costs for obtaining searches before and after the transfer, and fundamentally, costs for Stamp Duty.

These costs must be paid, whether the purchaser is an individual or a corporate entity. The question therefore, arises, as to what are the cost-saving measures available to a purchaser of poperty or land owned by a limited liability company. In this series, we will endevour to explore these isssues with a view of advising you and or generating debate thereon.


Company law permits free sale and transfer of shares, subject only to such restrictions as a the company's constitutional documents may dictate. In this regard, one of the easiest and cheapest way for acquiring land owned by a company is to purchase such shares in the company as are equivalent to the value of the consideration being offered.

Transfer of shares will involve preparation of Share Sale and Transfer Agreement, Share Transfer Deed (in the event of a transfer) or Return of Allotment of Shares (in the event of an allotment). The stamp duty costs incidental to share transfer are minimal and currently stand at 1 % of the consideration, usually, the value of the shares being sold. For instance, where the subject property is valued at Kshs. 300 Million and owned by a company whose shares are Kshs. 100.00 each, and the company has, say, 1,000 shares, 500 of which have been alloted to the current shareholders, the purchaser may be alloted the remaining 500 shares, for a consideration of Kshs. 50,000 (and not Kshs. 300 million). Whereas the consideration for the 500 shares will attract a stamp duty of Kshs. 500.00 only! the stamp duty on the Kshs. 300 million would be Kshs. 12 Million if the property falls within a municipality or Kshs. 6 million if the property falls within agricultural area.

The transfer or allotment of shares would subsequently be followed by a subdivion to be registered by the company as the applicant. The property can then be placed at the disposal of the purchaser on such terms as regards liability as the company may agree with such a shareholder.


Sale of shares is a viable option for acquisition of property, and will often result in saving costs on stamp duty.

This approach to acquisition of property will only work where the value of the company/its assets are predetermined as the company may own other assets other than the subject of the purchase. As such, a valuation of the company would be necessary to determine the proportionate shares to be transfered/alloted vis-a-vis the consideration being offered by the purchaser.

For further enquieries on cost saving measures in property acquistion transactions, please contact our Teddy OKELLO at for assistance. You may also call us on +254 773 865 798.

For: Taxlex Consulting Group Limited

MD & Group CEO

* Taxlex Consulting Group Limited is a participating consultancy in the SLS Group of consultancies, with specialty in tax and related advisories. 


  1. Cash Advances are exactly what the name implies. They are an advance to get you to your next payday. We all face unexpected expenses that can leave us short on money. With limited paperwork and time you can get back in control of your finances. cost saving solutions

  2. Thanks Steve Cooper for your comment. In deed businesses can substantively improve their profitability through adoption of cost saving solutions/measures, whether in form of cost saving transactional structures or adoption of cost-effective back-office solutions that offers.

  3. I recently came across your article and have been reading along. I want to express my admiration of your writing skill and ability to make readers read from the beginning to the end. I would like to read newer posts and to share my thoughts with you.

    Lizenzagentur & Lizenzen

  4. It was an amazing experience to visit this website and read the articles and contents.

    Agence de licence de marquee & Qu’est ce que le licensing?

  5. You got a really useful blog I have been here reading for about an hour. I am a newbie and your success is very much an inspiration for me.

    Licensing & Merchandising & International brand licensing

  6. I agree with you. Thank you for sharing the update. It is interesting to have it discussed widely, so that we can gain more objective opinions.
    Qu’est ce que le licensing?