Owning land or a building in Kenya comes with a yearly bill from the county government: land rates, sometimes called property rates. They are separate from income tax and capital gains tax, but they matter to every landlord and buyer, because unpaid rates can block the sale of a property.

What land rates are

Land rates are a charge levied by the county government on land and buildings within its area, under the county's rating laws. They pay for local services such as roads, drainage, street lighting and waste collection. The rate and the way it is worked out differ from county to county.

How they are calculated

The rate is usually a percentage of the land value set by a county valuation roll. A valuation roll lists each parcel and its value, and it is updated from time to time. Some counties also charge extra for buildings or specific services. If your valuation has risen sharply, you have the right to object within the time stated in the notice.

How to pay

Counties send a bill or post the amount on a county portal, and you pay online, by mobile money or at the county offices. Keep the receipt. Many counties charge a penalty on late payments and interest on arrears, and some offer discounts for early payment.

Why landlords care

  • Land rates are a deductible expense for a landlord on the annual route, if you pay them for the rental property; see deductible expenses for landlords. They are not deductible under the flat monthly route.
  • Arrears build up quickly when a landlord manages from a distance.
  • A business permit for a commercial property may depend on rates being up to date.

Clearance certificates

When you sell or transfer a property, the land registry usually requires a rates clearance certificate from the county, showing that all rates have been paid. If there are arrears, you must clear them before the transfer proceeds, which can delay a sale. Ask for the certificate early, because it can take time.

Buying a property

Before you buy, ask the seller for the rates receipts for the past years and a clearance certificate. If rates are unpaid, agree who pays them. Include rates in your costs; see the costs of buying property and stamp duty on property transfers.

Keep track of the bills

A register of each property, its rates bill, the due date and the date you paid avoids penalties. The free rental property and tenant register lists your units, and the KRA filing and payment calendar can hold county dates alongside your tax dates. Record the payments with your other costs in the tax records checklist and document log.

Rates and your return

Rates are a cost of owning the property, so include them when you work out the profit from a rental. The rental income annual tax computation workbook has a column for insurance and rates, and our guide to monthly rental income tax or annual tax shows how the costs change the choice between the routes.

If you cannot pay

Speak to the county before the arrears grow. Some counties allow payment plans and occasionally announce amnesties on penalties.

Rating rules differ by county and are revised from time to time. Confirm the current position with your county government.

Common questions

Who must pay land rates? The owner of land or property within the county's rating area, as shown in the county's valuation roll, even if the plot is vacant. If you have recently bought, check that the previous owner's arrears have been cleared.

What if I do not pay? Counties charge penalties and interest on arrears and can take recovery steps. Unpaid rates also prevent you from getting a rates clearance certificate, which is needed to transfer the property.

Can I challenge the valuation? Yes. Counties publish a valuation roll and allow owners to object within the period stated. Keep your own evidence of the property's value and apply in writing before the deadline.