Land, house, shares deals hand Treasury Sh26.8bn

This story has significance for readers across Kenya and beyond.

Tax collections from sale of land, houses and shares in private companies climbed 28 percent to Sh26.8 billion in the financial year to June 2026, pointing to a rebound in asset transactions in a year the High Court clarified when dues from property deals become payable.

The jump was the fastest in at least six years, generating an extra Sh5.82 billion from Capital Gains Tax (CGT) and stamp duty in the year ended June.

CGT is the levy investors pay on profits—or gain—made when they sell, give away, or dispose of an asset, such as shares or property like homes. The tax is paid on the gain—or profit—investors make after deducting costs associated with the property, such as upgrades, legal fees, and mortgage interest, and not the value of the asset itself.

The increase in CGT collections in the financial year to June 2026 was nearly eight times the Sh751 million added in the previous financial year 2024/25, when growth in the combined tax receipts slowed to a modest 3.71 percent.

Collections had grown by 7.73 percent in 2021/22, 6.66 percent in 2022/23 and 13.53 percent in 2023/24, before losing momentum in the subsequent year, National Treasury data shows.

Over the six years, collections have risen from Sh15.51 billion in 2020/21 to Sh26.8 billion in 2025/26, an increase of Sh11.29 billion, or nearly 73 percent, suggesting that taxes on property and financial transactions are growing into a key source of government revenue.

More than half of that increase came during last financial year, underlining the strong acceleration in receipts from transactions involving transfer of property and financial assets as the Kenya Revenue Authority intensifies efforts to capture them.

The growth coincided with a period of heightened legal scrutiny over CGT, including a landmark High Court ruling that clarified when the tax becomes payable.

In a July 31, 2025 ruling, the High Court held that CGT becomes applicable when property is sold and paid for, rather than when the transaction is approved by the Lands Registry.

The case involved businessman Rupen Mulchand Haria, who challenged KRA’s demand for an additional Sh416.97 million in CGT following sale of his shares in Harleys Limited to Westlands Heights Limited.

The ruling came early in the same financial year in which receipts from CGT and stamp duty recorded their strongest growth in the period. CGT is charged at 15 percent of the net gain made when taxable property or assets are transferred, with the seller generally responsible for paying the tax.

The tax does not apply to some transactions, including transfers between family members, certain sales of land measuring less than 50 acres in rural or agricultural areas, some corporate restructurings and registered real estate investment trusts.

The tax should be remitted to KRA by the 20th day of the month following the transfer.

The taxman has in recent years faced disputes over the timing of CGT, particularly after Parliament raised the rate from five percent to 15 percent through the Finance Act, 2022.

KRA began enforcing the higher rate in January 2023, prompting some investors and companies to accelerate transactions or file returns before completion in an attempt to avoid the increased liability.

The disputes involved several high-profile investors, including firms linked to cosmetics entrepreneur Paul Kinuthia, whose Nice & Lovely brand was sold to French-owned L'Oréal, and politician Peter Kenneth, who sold his stake in Mayfair Bank to Egypt’s Commercial International Bank and textile businessman Jaswinder Bedi.

KRA also pursued shareholders of pharmaceutical distributor Harleys, which was sold to Mauritian conglomerate IBL Group for Sh3.69 billion, including Mr Haria, over the timing of the transaction and applicable CGT rate.

Besides CGT, stamp duty also provides another source of revenue from asset transfers.

Stamp duty is charged at four percent on transfers of urban or municipal land, two percent on rural land and one percent on transfers of shares.

Unlike CGT, stamp duty is generally paid by the buyer and must be remitted to KRA within 30 days of executing or receiving the relevant legal instrument.

Certain transactions are exempt, including first-time buyers under specified Affordable Housing schemes and some dispositions involving family trusts.

The stronger collections could reflect increased property and share transactions, higher asset values, larger taxable gains, or improved compliance among taxpayers transferring wealth and assets.

Reporting originally appeared via Business Daily. Read the full source for additional context.