Nairobi seeks Sh54 billion from land rates, considers shift to property utilisation tax

 Nairobi City County is amplifying its initiatives to recover billions in outstanding land rates, cautioning that the properties of defaulters may be auctioned if their debts remain unpaid.

  The county is targeting nearly 200,000 property owners who owe Sh54 billion, with Governor Johnson Sakaja noting that a significant portion of non-compliance originates from affluent owners, while other revenue streams continue to perform well.

He proposed that the county might transition from determining rates based on land value to charging according to the utilization of properties. Governor Johnson Sakaja previously disclosed that out of 250,000 land parcels within the city, only between 50,000 and 60,000 accounts are currently remitting rates. Nairobi’s Own Source Revenue (OSR), which encompasses fees, levies, and service charges, increased to Sh13.5 billion for the year ending June 2025, rising from Sh12.8 billion the previous year. Land rates continue to be the primary contributor, generating Sh3.25 billion last year, although their proportion of the city’s OSR has decreased from 27 percent to 24 percent over the past nine years. This situation has resulted in Sh54 billion being the total amount owed by property owners. City Hall has not clarified the criteria or circumstances surrounding the substantial write-off. The Sh1.45 trillion that was removed from the financial records could have supported the county’s budget for 43 years, considering its total expenditure of Sh33.53 billion for 2024/25. Officials contend that if all property owners fulfilled their financial obligations, the total county revenue, which includes OSR and national allocations, could rise from Sh36 billion to Sh50 billion. "You will observe us enforcing penalties and auctioning properties because it is imperative that individuals fulfill their payment obligations," stated Governor Sakaja.

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