Land Owners Guide to Land Rates and Land Rent Payment in Kenya

October 27, 2021

blog

In Kenya,
county governments have legislative authority to levy property taxes to finance
some of the costs of the
services they provide. Land tax is one of the land taxes imposed and varies depending on the location and size of the land e.g. Kshs 1,000 per hectare per annum. Land tax is levied only in designated urban areas while most agricultural land is not taxed. This tax applies equally to land whose
title is on freehold and on leasehold basis. Land rates are charged on each
parcel of land and payable to the county government. land rent
is imposed on leasehold parcels and is paid to the ministry of land and
physical planning through itax.

Land tax varies by county with Nairobi having the highest rate of 8% of the value of land. Governments make decisions on the commercial value of
the land. This amount is payable in most county cash offices. Upon full payment of all rates, one is issued
with the rates clearance certificate which is conclusive evidence that all
rates due and interest accrued have been fully paid.

How to pay your land rates online in Nairobi

To pay your land rates online in Nairobi, you will first need to register on NCCG epayments Portal or using the USSD *217# on your phone.

After registering on the online payment platform:

Log into your account

1. Find the land search option by clicking on the ministry of land
  and urban housing

III.
You will be prompted to enter
your title number. Complete the form submit it

1. Confirm your details and make the payment for the required amount

If the payment is successful, you will have the option of printing
the payment slip.

To search registered owners, pay for land
rates in Kiambu, please visit the Kiambu
County Portal.

Land rent on the other hand is a levy
imposed on leasehold parcels of land where the annual rent has been reserved at
the time the grant is being issued and its payable to the Ministry of Lands and
Physical Planning under Sect 28 of the Lands Act. Land rent
clearance certificate is a document that serves as evidence of payment of land
rent. It is issued upon application and payment of all the outstanding land
rent levies. The Land rent clearance certificate is valid for one year.

How to pay land rent.

The process is quite simple because it is done using any type of mobile
phone. Here are the steps that you should follow;

I.
Register by sending an sms with the word ‘lands’ to the number 21504. An
sms confirming your subscription to the land service will be sent to you.

II.
Dial *512# so as to access the service.

III.
You will receive a prompt asking you if you want to continue registering.
Note that you will be charged Kshs 5 per sms for this service.

IV.
If you choose to proceed, you will receive another prompt with the
options such as registering your land, land tracking and land rate payment.

V.
For the case of the land rate, you will be required to enter your land
reference number, I.D number and to confirm your details.

VI.
You will then receive an sms with your payment options.

To pay land rates online:

I.
Open the browser and visit ecitizen then sign in or sign up to your
registered account.

II.
Click on the ministry of Land and Urban housing development to click on
the land search.

III.
Then just enter your land title number, fill the online form and then
submit it. Confirm the details that have been entered and then proceed for
making the payment.

IV.
Once the payment has been confirmed then you will have the option of
printing the results.

An advantage this tax holds over other
taxes is that its assessment is simple to understand and to execute. It does not require complicated methods
of calculations and assessments. Further, the collection and assessment costs are
usually low. The tax rates are varied across regions to take account of the property location. This way, properties in
developed counties can be charged more while developing counties charge less
which promotes equity.

A disadvantage is that the value of
property is subjective leading to the tax amount not being reflective of the value
of the land or its actual productive capacity and may punish the registered. Due
to at times the low nature of the tax, it does not encourage optimal
utilization of land.

In summary:

The case for taxing land in both urban and
rural areas in Kenya is strong and compelling. In Kenya, while most people
already understand the need to pay land rates, most land owners only pay land
rent on transfer or charge of their property. Any owner could lose their property for default of payment of Property tax and accumulation of penalties levied. In case you are
a landowner and your schedule doesn’t leave time to visit county governments to
check land rates applicable on your property or to pay these taxes, contact us
on 0726982982 and we shall have a personal assistant go and make payments on
your behalf.