Ministry of lands, Public Works, Housing and Urban Development Principal Secretary Nixon Korir addressing journalists during a joint memorandum presser by the State Department for lands and physical planning and the Land Sector players on transitional measures to allow registration of Long-term leases during the Geo-referencing of the properties at Ardhi House, Nairobi on August 3, 2023. PHOTO | BONFACE BOGITA | NMG
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 review in efforts to raise an extra Sh8 billion.
Lands Principal Secretary Nixon Korir told Parliament that the government collects Sh3 billion annually in land rates and rent that were last reviewed decades ago.
Kenya is 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in the urban centres, have been surging in recent years on growing demand but counties have been losing out on outdated rates.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,” 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“The rent or rates being applied currently are outdated.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 Sh30 in land rent annually.”
Mr Korir told the National Assembly’s Committee on Land that the review is expected to generate an extra Sh8 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 told the committee chaired by North Mugirango MP Joash Nyamoko that county governments should impose an annual penalty for property owners who fail to pay the rates.
He said if the review is done and enforcement is made to collect the taxes, the government will collect a lot of money.
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 Sh20,040 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,” Mr Korir said.
