Nairobi seeks Sh54 billion from land rates, considers shift to property utilisation tax
Nairobi Governor Johnson Sakaja had earlier revealed that out of 250,000 land parcels in the city, only 50,000 to 60,000 accounts are paying rates.
Nairobi City County is intensifying efforts to recover billions in unpaid land rates, warning that properties of defaulters could be auctioned if debts remain unsettled.
The county is pursuing close to 200,000 property owners who owe Sh54 billion, with Governor Johnson Sakaja pointing out that the bulk of non-compliance comes from wealthy owners, while other revenue sources continue to perform.
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He suggested that the county might shift from basing rates on land value to charging based on how properties are utilised.
Nairobi Governor Johnson Sakaja had earlier revealed that out of 250,000 land parcels in the city, only 50,000 to 60,000 accounts are paying rates.
The governor said low compliance has limited the county’s own source revenue, even as National Treasury allocations to counties face delays.
Nairobi’s OSR, which includes fees, levies, and service charges, rose to Sh13.5 billion in the year ending June 2025, up from Sh12.8 billion the year before.
Land rates remain the leading contributor, bringing in Sh3.25 billion last year, though their share of the city’s OSR has declined from 27 per cent to 24 per cent over the last nine years.
During the year ending June 2025, the county undertook a major review of unpaid land rates, writing off Sh1.45 trillion in debts.
This left Sh54 billion as the amount currently owed by property owners. City Hall has not explained the criteria or circumstances behind the massive write-off.
The Sh1.45 trillion removed from the books could have sustained the county’s budget for 43 years, given its total expenditure of Sh33.53 billion in 2024/25.
Officials argue that if all property owners paid their dues, total county revenue, including OSR and national allocationcould increase from Sh36 billion to Sh50 billion.
“You’ll see us clamping and auctioning property because people must pay for it,” Governor Sakaja said.
The county is moving under the National Rating Act, 2024, which allows enforcement through penalties, interest, and property auctions for those who default on land rates.
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