Understanding Land Rates: Annual Tax Levies for Property Owners and Their Impact on Public Services

 Understanding Land Rates: Annual Tax Levies for Property Owners and Their Impact on Public Services

Land rate is a tax levy that is paid by land owners to the local authority/county. It is mandatory and recurring payment that is made annually. Land rate is crucial in supporting the maintenance of public services that contribute to the wellness of an area. The services include security measures, provision of water, street lighting, and garbage collection, among other things. The provision of these services ensures that residents of a particular area live in a safe and clean environment. Land rates are governed by the Rating Act, Cap 267 and the Valuation for Rating Act, Cap 266. 

I. PREPARATION OF LAND RATES

Land rates are prepared by the local authority through the valuation of rateable properties, and the values are then entered into a valuation roll, which captures records of all properties within the area. Specifically, the valuation roll includes: 

1. the description, situation and area of the land 
2. The name and address of the owner 
3. The value of the land 
4. The value of unimproved land 
5. The assessment for improvement rate (a value derived from deducting the value of the unimproved land from the value of the land).

Once the valuer has drafted a valuation roll, the roll is delivered to the town clerk who lays it before the local authority. The roll is open for public inspections and is tabled for a meeting with the local authority. A notice is sent to every rateable owner, and they have 28 days to object to the rates via a notice of objection. If no objections are made, or if the objections are withdrawn the valuation roll is endorsed. If an objection is made, the matter is referred to the valuation court, whereby the parties are heard and a determination is made. The valuation Court may either confirm or amend the Valuation Roll. Once the amendments are made, the Valuation roll is endorsed and a certificate is signed to that effect. The valuation roll is then published, and owners are entitled to make annual land rate payments. 

II. PAYMENT OF LAND RATES 

A notice of at least 30 days is published that contains the rates and the date by which rates are payable. Any late payments attract an interest of 3% per month. Payments can be made by physically going to the County office, by a bank deposit, or by using the eJIJI payment service. For the latter method, one must have registered with the payment portal, also, this service can be accessed by dialling *217#. Once payment has been made a certificate of clearance is issued which is evidence that all payments are made and there are no outstanding payments. To encourage the payment of land rates, counties may from time to time advertise waivers for a certain financial period. The waiver only lasts for a limited time, and once the period is over and the waiver is not sought, the original outstanding amount has to be paid. 

III. HOW LAND RATES ARE COMPUTED.
Land rates vary from county to county. When rating, the authority looks at various factors such as the area, the market value of the land or property, and the services and amenities offered within the area. The authority with the approval of the cabinet secretary may then impose a: 

1. flat rate 
2. Graduated rate which changes with changes in the market value of the land 
3. A differential flat rate or graduated rate that is based on the use of the land 
4. An industrial rate for land use other than agricultural or residential purposes 
5. A residential rate for land used for residential purposes 

IV. IMPORTANCE OF PAYING RATES 

Firstly, it is important to pay rates to avoid unnecessary litigation instituted by the County for the payment of the rates and interest thereon. Secondly, at the time of disposing off property, one of the important and mandatory documents required is a land rates clearance certificate. Consistent payment will avoid the instance of having to pay a high fee that is computed together with accrued interest. 

If you need any further assistance, please contact us through Felicia Solomon at felicia@mmsadvocates.co.ke or Suhaila Noorani at suhaila@mmsadvocates.co.ke or through our office at mms@mmsadvocates.co.ke