On December, 4th, 2024 President Willian Ruto Signed the National Rating Bill, 2022 into law. The Bill, is now referred to as the National Rating Act 2024 after undergoing the law making process for several years.
The Act is supposed to provide a uniform framework for county governments on how to value and rate land. Additionally, this law empowers county governments to increase compliance in land rates payment- and ultimately provide a reliable revenue source for counties.
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Revenue Conflicts
Previously, County governments were subjected to outdated rating and valuation laws, often resorting to internal bylaws to rate land. Increasing land rates is seen as the lowest hanging fruit to increase revenue generation for counties.
Subsequentl, increased local revenues will reduce overeliance on the National government and reduce annual tensions. In 2024, there was a surge in conflicts and protests in several counties as different county governments attempted to increase collection of land rates.
Protests in Counties
Nairobi County, for instance, published a long list of over 200,000 land rates defaulters in mid 2024, Thereafter, the county government announced new measures to compel defaulters to pay up their dues. Elsewhere, in Kajiado County residents and MCAs protested the Finance Act, 2023, an internal bylaw which increased land rates and targeted freehold land.
Kiambu County also witnessed similar protests leading the county government to rescind it’s Rating Act, 2016. Toward the end of the year, Nakuru county also announced increments in the Land Rates, leading to protests.
Related:
What’s in the National Rating Act 2024
With the National Rating Act, 2024, county governments will now be relying on the provisions within the Act. The Act seeks to establish a National Rating Tribunal to deal with disputes concerning land rates. It also provides critical definitions such as rateable property, rateable owners and the powers or relevant authorities involved in rates collection.
It also outlines the procedures for drafting and gazetting new land rates and provides a clear list of properties exempt from paying land rates. Agricultural Freehold land is exempted from paying land rates according to the National Rating Act, 2024.
Who Pays Land Rates in Kenya: Understanding Rateable Owners
The term rateable owner broadly covers individuals or entities with significant control or ownership of property. The list goes beyond the people whose names appear on a title – thus providing clarity on who takes liability for different types of properties. These definitions also seal legal loopholes that may have otherwise been used to avoid paying land rates. Here’s who qualifies as a rateable owner in Kenya:
Who Is a Rateable Owner?
A rateable owner is responsible for paying land rates and includes:
- Long-term leaseholders with leases of 21 years or more, where ownership rights are intended.
- Registered interest holders listed in official land records.
- Executors or administrators managing an estate after someone passes away, under the Law of Succession.
- Trustees, including public trustees, managing land on behalf of others under various trustee laws.
- Administrators or liquidators handling land during bankruptcy or insolvency proceedings.
- Sectional property holders, such as apartment or unit owners under the Sectional Properties Act.
- Occupiers of rateable land, even if they are not owners.
- Beneficial owners—those receiving income (like rent or profits) from the property.
Responsibilities of a Rateable Owner
If you fall under any of the categories above, the law places certain obligations on you:
- You must provide accurate information about the property for valuation purposes when requested by county authorities.
- You are required to pay land rates promptly as they become due.
- If the property is jointly owned, each owner is jointly and severally liable, meaning the county can collect the full amount from any one of the co-owners.
What Happens If You Don’t Pay Land Rates? Penalties Explained
One of the biggest challenges county governments deal with in collecting land rates is non-compliance. The National Rating Act, 2024 sought to deal with this issue by recommending electronic and modern ways of collecting land rates.
In addition, punitive measures have been recommended to deal with defaulters. Failure to pay land rates in Kenya can trigger a series of penalties and enforcement actions by the county government, as outlined in the National Rating Act 2024. Once a rateable property owner defaults, the county government is authorized to serve a written demand, requiring payment within 60 days. If this notice is ignored, the consequences can be significant.
The county governments are empowered by the law to:
- Impose a penalty calculated at the prevailing Central Bank Rate.
- Deny access to certain county services until payment is made.
- File a lawsuit against the defaulter to recover unpaid rates.
- Place a charge on the land by notifying the Registrar of Lands.
- Use any legally authorized method to recover the amount due.
If, after all this, the rates remain unpaid, additional recovery measures include:
- Appointing a receiver to collect rent from tenants on the property.
- Claiming a share of the property in succession matters, if ownership is under probate.
- Attachment of debts owed to the landowner.
- Auctioning the property at market value to recover the unpaid rates.
Each county is also required to outline specific implementation procedures through county legislation, so it’s essential to check your local county laws for details.
Who is Exempt from Land Rates Under National Rating Act 2024
Besides Freehold Agricultural land, the National Rating Act 2024 outlines a list of other properties that are exempt from paying land rates. These are mostly properties used purely for public benefit. Here’s a breakdown of the types of properties that are exempt from paying land rates:
Land Exempt from Rates
The law prohibits county governments from charging land rates on parcels used exclusively for public purposes. Specifically, land used for the following purposes will not be valued or rated:
- Public religious worship (such as churches, mosques, and temples)
- Cemeteries, crematoria, and other burial or burning grounds
- Public health facilities (e.g., public hospitals and clinics)
- Public educational institutions and libraries
- Dams
- Wayleaves (land used for utilities such as water pipes, power lines, etc.)
- Museums and national monuments
- Public outdoor sports facilities
Important Note: If the land is being used for profit-making or residential purposes, even if it’s under one of the categories above, it will not be exempt.
Partial Exemptions
In some cases, only part of a property may be exempt. For example:
- Places of worship that also operate profit-generating ventures (like rental halls or shops) will only have the actual place of worship exempted—the commercial areas will be rated.
- Properties leased to foreign embassies or missions will be rated if the land is still registered under the name of the original (rateable) owner.
Future Clarifications
To ensure clarity and consistency, the Cabinet Secretary has the authority to issue regulations that will:
- Define how much of a property is considered to be used for public purposes
- Set criteria to assess whether land is genuinely intended for public use
- Decide if other land types not listed can still be rated
Conclusion
Although attempts to increase compliance within counties have been met with protests in the past, the heat is slowly been turned. County governments are now more empowered by the National Rating Act 2024 , thus insulating them from legal issues. Moving forward, property owners will need to pay close attention to gazette notices on land rates within their respective counties to avoid property loss.
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