Property Tax in Kenya for Swiss Residents

Taxation is often the first concern for Swiss investors looking to acquire property in Kenya. Good news: the tax framework is favourable, the double taxation treaty avoids pitfalls, and with the right structure you can optimise your situation. Here is everything you need to know.

1. Property Taxation: The Basics

Before diving into details, here are the fundamental principles of property taxation in Kenya for a Swiss resident:

• Kenya taxes properties located on its territory: this is the principle of territoriality. A plot in Kenya is taxable in Kenya
• Switzerland taxes its residents on worldwide income and wealth: you must declare your foreign assets to the Swiss tax authorities
• The double taxation treaty prevents paying twice: tax paid in Kenya is creditable against Swiss tax
• Kenyan taxation is light: no wealth tax, no inheritance tax

2. Switzerland-Kenya Double Taxation Treaty

Switzerland and Kenya have signed a double taxation treaty (DTT) that determines which country has the right to tax which income and assets. This treaty follows the OECD model.

Key principles of the DTT

• Real estate: taxable in the country where located (Kenya). Switzerland exempts these assets from wealth tax, but they are considered for the tax rate calculation (progression reserve)
• Rental income: taxable in Kenya. Exempt in Switzerland but enters the rate calculation
• Capital gains on property: taxable in Kenya. Exempt in Switzerland unless you are considered a real estate professional
• Dividends from a Kenyan company: taxable in Kenya with a maximum rate of 15% under the DTT

3. Taxation of Rental Income

If you rent out your property in Kenya, rental income is subject to tax in Kenya.

In Kenya

• Rent received is subject to rental income tax
• Tax rate: 10% on gross rental income (simplified regime) or 30% on net profit (actual regime)
• Threshold: annual rental income below KSh 288,000 (~CHF 2,000) is exempt
• Declarations are filed via iTax (Kenya Revenue Authority online portal)

In Switzerland

• Rental income is exempt but enters the progression reserve
• You must declare it in your Swiss tax return
• Management, maintenance and insurance costs are deductible

4. Capital Gains Tax on Property

Kenya applies a Capital Gains Tax (CGT) on the sale of real estate. Rules in 2026:

• Rate: 5% of the selling price (not the gain, which is very advantageous)
• Holding period: CGT applies if you sell less than 5 years after purchase
• Exemption: if held for more than 5 years, the gain is fully exempt in Kenya
• Primary residence: exempt from CGT

In practice, if you hold your land for more than 5 years, you will pay no capital gains tax, neither in Kenya nor in Switzerland. This is a considerable advantage compared to Switzerland where property capital gains are taxed (between 12 and 36% depending on the canton).

5. Land Rates (Property Tax)

Property tax in Kenya, called land rates, is very modest:

• Rate: approximately 0.1 to 0.3% of the land value per year
• Collected by: the county where the property is located
• Example: for land worth KSh 1,000,000, annual tax is about KSh 1,000 to 3,000 (CHF 7 to 20)
• Payment: online via the county portal or at the one-stop shop

6. Declaration in Switzerland

As a Swiss resident, you must declare your Kenyan property in your tax return.

Step 1: Asset declaration

The land or house must be declared under "Foreign real estate". The tax authority typically requires:

• The acquisition value (in CHF)
• The address and description of the property
• The imputed rental value (if you occupy it)
• Land rates paid in Kenya

Step 2: Income declaration

Any rental income should be declared under "Income from foreign real estate". Attach:

• Proof of rents received
• Proof of tax paid in Kenya (KRA certificate)
• Management, maintenance and insurance costs

7. Inheritance Taxation

One of the least-known advantages of Kenyan property investment: Kenya does not levy inheritance tax. Your heirs can receive your Kenyan property without paying tax in Kenya.

However, if your heirs are Swiss residents, the property will be considered in Swiss inheritance tax calculations (varies by canton and relationship). In Geneva, inheritance tax between spouses is zero, but between parents and children it ranges from 4 to 15%.

For optimisation, consider: inter vivos gifts (no tax in Kenya), a Kenyan company holding the property (share transfer), or a trust.

8. Tax Optimisation Strategies

Purchase via a Kenyan company

Setting up a Kenyan company to hold your land can offer advantages: deduction of management and maintenance costs, easier transfer (share transfer), personal asset protection.

99-year leasehold

For individual investors, the 99-year leasehold is the simplest and most tax-efficient solution. No company creation, no accounting, individual declaration.

Long-term holding (over 5 years)

The simplest strategy: hold your property for over 5 years to benefit from full capital gains exemption in Kenya.