Land rates in Nairobi, Mombasa, Nakuru, Kisumu, Eldoret and Kiambu are set to go up after the Treasury approved the Ministry of Lands’ request for a rates review in a bid to raise an extra Sh8 billion.
Lands Principal Secretary Nixon Korir while speaking in Parliament said that the government collects Sh3 billion annually in land rates and rent that were last reviewed decades ago.
He pointed out that the country is currently using the Valuation for Rating Act of 1956 and the Rating Act of 1963 that have denied counties billions of shillings while property prices went up.
Prices of land and houses, especially in the urban centers, have been surging in recent years on growing demand but counties have been losing out on outdated rates.
The Treasury has allocated the Ministry of Lands an extra Sh150 million to carry out a fresh review of the land rates starting with six counties.
“We have been allocated Sh150 million by the Treasury to review land rates and rent in Nairobi city, Mombasa city, Nakuru, Kisumu, Eldoret and Kiambu. The rent or rates being applied currently are outdated.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 Sh30 in land rate annually.” He said
The PS told National Assembly’s Committee on Land that the review on Land rates is expected to generate at least Ksh. 8 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 called on counties to impose a penalty on property owners who fail to pay rates or rent.
Mr Korir told MPs that the Ministry collected Sh832.6 million from Land Rent against a target of Sh210.5 million in the year to June 2023.
On Stamp Duty, the ministry netted Sh5.8 million against a target of Sh11.2 million while Stand Premium on town plots generated Sh188.4 million against a target of Sh103.8 million.
The Ministry also collected Sh597 million against Sh973 million from other Land Revenue. Land Adjudication and case fees amounted to Sh. 20,040 against a target of Sh26.7 million leaving a shortfall of Sh26.6 million.
Data submitted by Mr Korir shows that the Ministry collected Sh4.9 million against a budget of Sh8.9 million from conveyancing fees.
Land Valuation fees generated Sh6 million against a target of Sh55.4 million while the ministry collected Sh54 million from the Land Registration fees.
“The State Department collected revenue amounting to Sh1.69 billion against a target of Sh1.42 billion as at June 30, 2023,” He said