Land Rates Under the National Rating Act in Kenya 2026: Nairobi's New Structure, County Compliance and What Property Owners Must Pay

The National Rating Act, 2024 was assented to on 4 December 2024 and took effect on 24 December 2024, repealing both the Rating Act and the Valuation for Rating Act that had governed county property rates since the colonial era. The new statute is a national framework that gives the 47 county governments until December 2026 to align their local rating laws with the Act, while their existing valuation rolls remain valid during the transition. From 1 January 2026, Nairobi County became the first major county to enforce a new land rate structure and waiver-expiry penalties under the new framework. For property owners across Kenya, including the diaspora landlords who hold a significant share of urban rental stock, the framework changes both how rates are calculated and how disputes are resolved.

What the National Rating Act Does

The Act creates a standardised national framework for the imposition, assessment and collection of rates on land and on buildings on land. It introduces three rating instruments that counties may adopt: an area-based rate that applies a fixed shilling amount per unit of area, an unimproved site value rate that applies a percentage to the value of land excluding improvements, and an improved value rate that applies a percentage to the combined value of land and improvements. A county may use one or a combination of these instruments by passing its own Rating Act through the County Assembly.

The Act establishes the Office of the Chief Government Valuer with national responsibility for setting valuation standards, supervising county valuation rolls, and accrediting valuers. It also creates the National Rating Tribunal to hear disputes between ratepayers and rating authorities. The Tribunal sits in panels of at least three members, has the powers of a subordinate court, and decisions may be appealed to the Environment and Land Court.

The 24-Month Transition Window

Counties whose rating laws predate the new Act must align them with the Act by December 2026. Until each county adopts its own aligned legislation, its existing rates and valuation roll continue to apply, but new dispute filings are routed to the National Rating Tribunal under transitional provisions. Counties are required to consult publicly when adopting their county rating bills, and the consultation must include landlords, business chambers, residents associations and informal-sector traders affected by rates on land used for commercial purposes.

Nairobi County's New Structure From January 2026

The Nairobi City County Government issued a public notice in late 2025 setting out the new land rate structure effective 1 January 2026. The structure is anchored on the 2019 valuation roll for residential zones and on a refreshed commercial roll for the central business district, Westlands, Upper Hill, Kilimani, Lavington, Industrial Area and Nairobi West. Rates are calculated at differentiated percentages on the unimproved site value, with concessional rates for residential properties and higher rates for commercial and industrial properties. The minimum annual rate per parcel was raised to give the County a predictable base revenue from every plot.

The County's waiver of penalties and interest on outstanding rates, which had been extended several times to encourage compliance, expired on 31 December 2025. From 1 January 2026, unpaid rates attract penalties and interest computed as set out in the County Rating Bill. Property owners with arrears are expected to enter a payment plan with the Department of Revenue Administration or risk caveat lodgement and, in serious cases, distress for rates under section 25 of the County Government Public Finance Management Act.

How to Pay Land Rates in Nairobi

The recommended channel is the Nairobi City County eCitizen-integrated portal, which generates a payment reference for each Land Reference Number. Payment can be made via M-Pesa Paybill 235395 with the account number set to the Land Reference Number, by Visa or Mastercard through the portal, or in person at the Town Hall cash office. The portal generates a Clearance Certificate that is required for any transaction involving the parcel, including sale, lease, charge or sub-division. Sellers who attempt to transfer property without a current Land Rates Clearance Certificate will be blocked at the registry.

For Mombasa, Kisumu, Nakuru and the other 43 counties, similar payment channels exist either through eCitizen integration or the county's own portal. Diaspora owners often appoint a local property manager, advocate or family member with a power of attorney to monitor the bill and pay before deadlines.

The Role of the Chief Government Valuer

The Chief Government Valuer's office under the Ministry of Lands now plays a central role. The Valuer issues practice directions on valuation, publishes the standard cost manual used in determining rates on improvements, and adjudicates objections to valuation rolls before they are formally lodged. The Valuer's accreditation list determines which private valuers may sign off on objections under the new framework.

How Disputes Work Under the New Tribunal

A property owner who disputes the value placed on the parcel, the band into which the parcel has been placed, or the rate amount may file an objection with the county Rating Authority in the first instance. If the objection is rejected or unaddressed within 60 days, the owner may file a reference at the National Rating Tribunal. The Tribunal hears references by way of a hearing on the merits, with both written submissions and oral evidence allowed. Decisions are typically issued within 90 days of the close of hearings.

Appeals from the Tribunal lie to the Environment and Land Court, and further to the Court of Appeal on points of law only. Because the Tribunal is national, references can be lodged from any county and consolidated where similar issues arise across counties.

What Diaspora Property Owners Need to Do in 2026

Three practical steps are recommended for diaspora property owners. First, confirm the current Land Reference Number, parcel size and zoning on the County portal and reconcile against the title deed; mismatches commonly arise where sub-divisions, amalgamations or zoning changes were registered with the Ministry of Lands but not relayed to the County. Second, settle any outstanding rates and ensure that the property has a current Land Rates Clearance Certificate; this is particularly important for properties held for sale or where a refinancing is planned. Third, register for the County's e-billing service so that annual demand notes are sent by email rather than physical mail, which often does not reach diaspora owners.

Owners of newly built improvements should also ensure that their building has been entered on the improvements roll where the County applies an improved value rate; failure to register can lead to retrospective assessments when the next valuation roll is published.

The Bigger Picture

County governments collected approximately Sh43 billion in rates and other property-related charges in financial year 2024/25. The National Rating Act is intended to lift this figure substantially over the medium term by standardising valuation, closing exemption loopholes and improving collection efficiency. The Act explicitly recognises that property rates are the most stable and least distortionary revenue source available to counties and that improving collection is a precondition for the gradual reduction of equitable share dependency on the National Treasury.

For authoritative information, property owners can consult the Ministry of Lands and Physical Planning, the Nairobi City County Government, the Council of Governors for cross-county comparison, and Kenya Law for the consolidated National Rating Act, 2024.

What to Watch Through 2026

Three indicators will shape the year. The first is the pace at which county assemblies pass their aligned rating bills; counties that miss the December 2026 deadline will face questions about the legal basis for their rates. The second is the publication of refreshed valuation rolls in Mombasa, Kisumu and Nakuru, which have lagged Nairobi by several years. The third is the early case law from the National Rating Tribunal, which will shape the practical contours of the Act and the appetite of property owners to challenge their bills.

For property owners, the most important habit to build in 2026 is the annual rates calendar: bill issuance early in the year, payment by 30 March to access the discount many counties continue to offer, and clearance certificate filing by year-end. Building these habits now will reduce friction in every transaction involving Kenyan land in the years ahead.