Land rates review to tap extra KSh8 billion

Following approval of the Ministry of Lands’ request for a review in an effort to raise an additional KSh8 billion by the Treasury, land prices in Nairobi, Mombasa, Nakuru, Kisumu, Eldoret, and Kiambu are expected to increase.
The government receives KSh3 billion annually in land rent and rates, which last underwent an evaluation decades ago, according to Lands Principal Secretary Nixon Korir, who spoke before Parliament.
Kenya uses the Rating Act of 1963 and the Valuation for Rating Act of 1956, which have denied counties billions of shillings in funding as real estate prices increased.
Due to rising demand, prices for land and homes have been rising, particularly in metropolitan areas, but counties have been losing out because of antiquated rates.
The Ministry of Lands will conduct a new evaluation of the land rates, beginning with six counties, thanks to an additional KSh150 million from the Treasury.
“We have been allocated KSh150 million by the Treasury to review land rates and rent in Nairobi city, Mombasa city, Nakuru, Kisumu, Eldoret and Kiambu,” Mr Korir said.
“The rent or rates being applied currently are outdated. Some property owners who own residential houses in prime areas like Nairobi’s Upperhill area pay as little as KSh30 in land rent annually.”
Mr Korir told the National Assembly’s Committee on Land that the review is expected to generate an extra KSh8 billion.
“The ministry has no capacity to enforce payment of rates every year. We only interact with the property owners when they transact on their properties. That is when they are forced to pay rates or rent,” Mr Korir said.
He said that county governments ought to levy an annual fine on property owners who don’t pay their assessments to the committee presided over by North Mugirango MP Joash Nyamoko.
He claimed that if a review is conducted and enforcement measures are taken to collect taxes, the government will receive a sizable sum of money.
According to Mr. Korir, the Ministry collected KSh832.6 million from Land Rent in the year ending in June 2023 as opposed to the KSh210.5 million that was the aim.
The ministry produced KSh5.8 million in Stamp Duty, falling short of its target of KSh11.2 million, and KSh188.4 million in Stand Premium, above its KSh103.8 million target for town plots.
Along with KSh597 million from other Land Revenue, the Ministry also received KSh973 million. In comparison to the aim of KSh26.7 million, the amount spent on land adjudication and case costs was KSh20,040, leaving a KSh26.6 million deficiency.
According to information provided by Mr. Korir, the Ministry received KSh4.9 million in conveyancing fees out of a KSh8.9 million budget.
In contrast to a goal of KSh55.4 million, land valuation fees brought in Sh6 million, and the ministry received KSh54 million from land registration fees.
“The State Department collected revenue amounting to KSh1.69 billion against a target of KSh1.42 billion as at 30 June, 2023,” Mr Korir said.
A property rate is an assessment made by a rating authority with the assistance of a valuer on the value of a property, including land.