This piece is in response to William Mbala, one of our readers who  requested to know more about payment of City/Municipal council land rates in the perspective Freehold land.

Property in Kenya can be acquired on freehold or leasehold basis. A freehold title will give the owner absolute proprietorship over the land in perpetuity. On the other hand, Leasehold property is held on a government lease for a specified period of time, which is usually 50 or 99 years. At the end of this period, the landowner applies for an extension (a process that takes approximately 6 months) of the lease, which is usually granted.

According to KenInvest, both freehold and leasehold land in Kenya are subject to local authority rates which is usually a fraction of the unimproved site value. However, leasehold is further subject to Land Rent, based on the size of the land. For most properties, payment is in form of a 10% deposit and the balance within 60-90 days.  Financing for purchase of a property can be obtained from Banks, Building Societies or Mortgage   Companies in Kenya. The Rating Act is an Act of Parliament that provides for the imposition of rates on land and  buildings in Kenya.

According to this Act, the rates levied by a rating authority on behalf of any urban council, area council or local council shall not exceed a quarter of the proceeds of any other rate within the area of that urban, area or local council,  without the consent of the Minister.

The rating authority is be entitled to retaining out of the  proceeds of any rate levied.  Every rate levied by any council under this Act  becomes due on the first day of January in the financial year for  which it is levied and is payable on such day in the same  financial year as shall be fixed by the council, which is bound to publish a thirty-day notice.