Information is Power

Save on tax before buying your first house

Leverage on the Home Ownership Savings plan (HOSP) to save for your future home and at the same time save on taxes. This is the best saving scheme ever in that the deduction is made before you are taxed and the savings are accessible without being taxed either!

  • Section 22C of the ITA sets out the substance of the plan
  • Available to those planning to own their first house
  • Persons are eligible to deposit funds with such plans to a max of Kes 4,000 p.m. and not less than Kes 30,000 p.a.
  • The amount of Kes 48,000 is the max amount for which a person can claim relief against the annual income
  • Funds should be deposited in an approved institution under “Registered Home Ownership Savings Plan”
  • Deposits allowed in the qualifying year and the subsequent nine years of income
  • Approved Institutions
    • Bank or financial institution registered under the Banking Act
    • Insurance Company licensed under the Insurance Act
    • Building Society registered under the Building Societies Act
  • Conditions
    • Employer has to have evidence that the scheme the employee wishes to join is registered by the commissioner of Income Tax
    • Employer to deduct and remit the amount to the operator of the scheme (approved institution) on behalf of the employee
  • Employers to attach to form P9A (HOSP) a declaration signed by the eligible employee
  • The declaration serves as verification and confirmation that the employee does not directly or indirectly own a permanent house

Save on tax after buying your first house

If you finance your home through a mortgage, leverage on the Mortgage interest relief to reduce the tax obligation;

  • Governed by Section 15(3)(b) of the ITA
  • Also referred to as Owner Occupied Interest
  • Available to those with a mortgage or home improvement loan from an approved institution
  • Should occupy the financed residence to claim the relief
  • Interest paid on amount borrowed from a specified financial institution deductible before ascertaining taxable income
  • Interest allowable – Kes 150,000 as from Jan 1 2006
  • If residence is occupied for part of a year, then the deduction should be reduced accordingly
  • No person should claim a deduction in respect of more than one residence
  • A married woman has an option to claim for deduction of interest paid provided;
    • The property is registered in her name
    • Employer obtains a signed declaration to avoid the husband from making a similar claim
  • Specified financial institution are the same as under HOSP
  • Conditions (to employer);
    • Allow interest paid by eligible employee on production of proof from the lending institution confirming interest payable on the loan
    • Where employee redeems the loan in the course of the year and no interest is subsequently payable the allowable deduction shall cease
    • The employee shall sign a declaration indemnifying employer against any false claim in this respect
    • Review payroll as from Sept and make necessary adjustment to ensure by year end, correct amount of interest has been allowed
    • Attach to form P9A a copy of interest certificate and statement of account from the specified lending institution

Due Diligence Checklist for purchase of Land or Building in Kenya



Before you buy or sell a home, commercial building or vacant residential land in Kenya, you should be aware of a range of issues set out in various laws in Kenya that may affect that property and impose restrictions or obligations on you, if you buy or sell it.


The range of issues span across many areas and it is therefore preferable that you obtain professional advice from a lawyer, valuer, architect, engineer, banker or an accountant depending on the type of transaction that you want to undertake with the property.


Luckily Build and Grow Africa Limited is composed of ten (10) professionals spanning across most of the areas relevant to property transactions in Kenya and we are therefore pleased to develop for you the check list below.


Please note however that the check-list is merely a guide and does not amount to professional advice that you should rely on.


In case you need specific professional advice kindly send your query to our contact email at [       ] and one of our professionals will arrange a meeting with you to understand the issue you and thereafter issue to you a suitable professional advice that you can then rely on.




  1.     Purchase of property


When purchasing property it is critical that you as the Purchaser undertake, preferably through a professional, the following searches or confirmations


  • an official search of the property to confirm the registered owner at the relevant land registry
  • an official search with the survey of Kenya to confirm that the property is not on public land, buffer zone, road reserve
  • an official search on the identity card of the seller, if an individual, at the National Social Security Fund Offices
  • an official search to confirm directorship of the seller, if a company, at the companies registry
  • confirmation of the Personal Identification Number details of the seller with the Kenya Revenue Authority


  1. Sale of Property


When selling property it is critical that you as the seller obtain the following documents or confirmations


  • confirm the citizenship of the purchaser as you cannot sell agricultural land in Kenya to a foreigner
  • it is the obligation of the seller to pay for any outstanding rent or rates of the property at the point for sale
  • it is the obligation of the seller to obtain completion documents like rates and rent clearances and consents at the point of sale and as such engage a professional to obtain this for you
  • make sure you keep copies of the sale agreements and the transfer of the property documents together with all receipts and supporting documents used in the sale for record purposes in case of queries in future
  1. Commercial and Residential Developments


When putting up commercial and residential developments you need to obtain the following approvals or documents


  • Building Plan Approvals
  • NEMA approval
  • Change of User of the title approvals in case the current use does not allow for commercial developments or multi-residential- both from the county government and the commissioner of lands
  • Certificate of Occupation


  1.     Other Considerations


Urban living/Towns


High density areas are attractive for their entertainment and service areas, but these activities create increased traffic as well as noise and odours from businesses and people. Familiarizing yourself with the character of the area will give you a balanced understanding of what to expect.


Apartments/Town houses


If the property is part of a subdivision with common property such as driveways, parkings or grounds, it may be subject to a management company. You may therefore be required to pay fees commonly known as service charge and follow rules that restrict what you can do on your property, such as a ban on pet ownership, levels of noise, parking restrictions etc.


Rural properties


If you are looking at property in a rural zone, consider the following:


  • Is the surrounding land use compatible with your lifestyle expectations? Farming can create noise or odour that may be at odds with your expectations of a rural lifestyle.


  • Are you considering removing native vegetation like trees? There are regulations which affect your ability to remove native vegetation on private property.


  • Kenyan Law restricts sale of agricultural property to foreigners.


  • Land Control Boards regulate the use of agricultural land in rural zones

Construction Advice

Here are valuable tips that will help you avoid costly errors in the process of acquiring a property:

  • Developer selection: Select a developer with the right set of values to deliver the project. Integrity and professionalism in key.


  • Budgeting: Planning your budget involves finding how much you can raise to ensure that you can see the process through to its end since pulling out mid-way into the process can be costly.

BUDGETING word cloud, business concept

  • Professionals: Ensure that the project in which you would like to invest has been completed with the supervision of professionals construction industry. This will give you the assurance that the property is constructed to the required construction and safety standards and save you additional costs due to repairs needed as a result of poor construction methods.


  • Site Visits: You should make visits during construction to confirm the project is being undertaken as planned.


  • Location: It is advisable to purchase a property that enable easy access to common amenities like shopping centers, banks, schools etc.