The Act provides for the charging, assessment and collection of income tax; for ascertainment of income to be charged and provides for administrative and general provisions.
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Section 5 of the Act provides that every instrument specified in the Schedule to the Act (except those exempted) however executed which relates to property situated in Kenya shall be chargeable with the stamp duty specified. However, stamp duty is not charged twice when one moves a mortgage or Islamic property finance arrangement from one bank to another.
路 Section 30A provides for affordable housing relief for a year of income to residential individuals eligible and who are allocated a house or those saving for purchase under an affordable housing scheme.
路 Section 96A of the Act (introduced through the Finance Act 2015) exempts payment of stamp duty on transfers relating to Real Estate Investment Trusts (REITS) that are authorized under the Capital Markets Act where it is shown to the collector of taxes that the effect is to convey or transfer a beneficial interest in property from one trustee to another trustee or to an additional trustee, or the effect is to convey a beneficial interest in property from a person/persons of the transfer of units in the real estate investment trust. Such an instrument only needs to be stamped with a particular stamp denoting that it is not chargeable with any duty.
路 Section 96A (4) provides that exemption of stamp duty for transactions whose effect is to convey a beneficial interest in property from a person/person of the transfer of units in the real estate investment trust will only apply to instruments executed before 31 December 2022.
路 Section 96B of the Act also exempts payment of stamp duty on transfer of title relating to Sukuk[1] arrangement if: at the beginning of the arrangement, the title shall be transferred from the original owner of the asset to the entity representing the interests of the Sukuk holders; and during or at the end of the arrangement, the title shall be transferred back to the original owner of the asset from the entity representing the interests of the Sukuk holders.
路 Section 97 of the Act further exempts documents including registration documents relating to a building society from paying stamp duty. Notably, however, the exemption does not extend to mortgages or to the release or discharge of a mortgage, which are far more significant.
路 Section 106 of the Act empowers the Minister (Cabinet Secretary responsible for Finance) with the power to exempt certain instruments from payment of stamp duty if the same is in public interest.
路 Section 117(1) l of the Act exempts first-time home buyers under the affordable housing scheme from payment of stamp duty. However, there are no mechanisms/published guidelines of determining who is a first-time home buyer with the consequence that this incentive has not been utilised. The main difficulty has been establishing who a first-time home buyer is.
路 Section 117(1) o exempts payment of stamp duty on transfer of a house constructed under an affordable housing scheme from the developer to the National Housing Corporation (NHC).
[1] Sukuk is a Sharia law-compliant bond. It denotes a financial product whose terms and structures comply with sharia (Islamic law), with the intention of creating returns similar to those of conventional fixed-income instruments like bonds.
