City Hall requires previously exempt property owners to reapply under the National Rating Act, 2024, ahead of the January 2027 billing cycle.
The Nairobi City County Cabinet, chaired by Governor Sakaja Johnson, has approved a fresh application process for property owners and institutions previously exempted from paying land rates, following changes introduced by the National Rating Act, 2024.
The resolution requires all exemption claims, including those granted under repealed legislation, to be reviewed against the new law.
The move aims to update City Hall’s records, verify eligibility and strengthen compliance as the county seeks to improve its own-source revenue collection.
The Act, which came into force on December 24, 2024, repealed the Valuation for Rating Act and the Rating Act, introducing a revised list of properties eligible for exemption.
Under Section 38, exemptions remain in place for land used for public religious worship, cemeteries, crematoria, burial grounds, public health facilities, public educational institutions, libraries, museums and public outdoor sports grounds.
The law also exempts land used for dams, wayleaves and national monuments. Freehold agricultural land falls outside the Act, while land used exclusively for public purposes, including roads, utilities and parks, is not subject to county rates.
One of the biggest changes affects private institutions that previously benefited from exemptions.
While the repealed laws covered hospitals, schools and outdoor sports grounds, whether public or private, provided the land was not used for profit, the new law limits these exemptions to specified public facilities.
Consequently, private hospitals, clinics, schools, colleges, universities and sports clubs may now be liable for land rates. Charitable institutions and student hostels also no longer enjoy the previous express exemptions.
Religious institutions will retain exemptions for land used for public worship, but commercial developments on the same property, such as shops and rental apartments, will not automatically qualify.
“Places of worship remain protected, and rightly so,” Sakaja said. “But a block of shops or flats on the same compound is a business, and the law now treats it like one.”
Landlords leasing property to foreign embassies and diplomatic missions will also be liable for rates where the properties remain registered in their names.
The new framework further focuses on the actual use of land rather than its intended future use, with the treatment of intended use left to regulations by the Cabinet Secretary responsible for Lands.
Nairobi County Receiver of Revenue Tiras Njoroge said the Lands sub-sector within the Built Environment and Urban Planning department would receive applications and verify property use, including through site inspections.
Applications should be submitted to the County Executive Committee Member responsible for Lands at City Hall.
Applicants must provide their plot or land reference number, rates account number, proof of ownership and the specific provision of the Act under which they seek exemption.
They must also submit evidence of the property’s current use, such as registration documents, photographs or a site plan. Where land serves multiple purposes, the portion claimed for exemption should be clearly identified.
The county is urging property owners to apply before the 2027 land rates billing cycle begins on January 1. However, previously exempted properties should note that their landrates started accumulating from the date of operation of the National Rating Act 2024.
The review comes as Nairobi seeks to improve compliance with land rates, a key source of county revenue.
According to county figures, only about 50,000 of Nairobi’s 250,000 registered land parcels pay rates consistently.
The county says improved compliance will help finance essential services, including road maintenance, street lighting, waste collection and healthcare.
