Important Things to Know About Land Rates and Rents
Land rates and land rents can be confusing and most people find it difficult to differentiate.
Most people confuse the terms Land rates and Land rents because they are both tax charges on land. Some think that they mean the same thing or are imposed the same way. An interview with a Real Estate lawyer who helped demystify the differences and similarities between the two. Some of the questions answered by the lawyer include.
1. What are they?
Land rates are an annual obligation to landowners, they come with a property that's within a rating area and must be paid to the county government. Land rent, on the other hand, is the price one must pay to maintain their title or exclusive right to use a certain piece of land. It can also be described as leasing a property.
Notice that both must be paid depending on your property.
2.How do you know you are liable to pay Land rates or rents?
When purchasing your property, you would know by the documentation you receive, the likelihood of you being liable to pay the Land rates or Land rents or both.
3. What are the criteria for rating areas or rentals areas?
It is good to note that not every land is within a rating area, however, most are. The rating areas are defined by the county government. Agricultural lands do not pay Land rates since the act that describes agricultural land defines the lands outside the rating areas. This however has exceptions. For example in places like Kitale, the farms stretch right into the town hence the owners of the farms find themselves within a rating area. Therefore, they are subject to rates even if they are agricultural lands.
When it comes to Land rents, it is safe to say that most properties within the townships tend to be leaseholds from the government and are subject to payment of Land rents.
4.The Payment of Both.
Land Rates are payable every year before March to the county government. You can pay your land Rates via Mpesa or online if in Nairobi via e-Jiji payment.
~The payment process
a)Log into your e-citizen portal and sign up if you have already registered if not do so.
b)Click on the ministry of lands, housing and Urban development link and choose the land search
c)Enter the title number, fill the online document and submit.
d) confirm the details and proceed to pay using any of the available payment methods indicated; Mpesa, debit and credit card or bank transfers.
e)Once the payment has been confirmed, the applicant can proceed to print the results. However, if you decide not to print, the results will still be available when you will need them in your e-citizen account. Payments for the land Rates are to be enforced by the county councils and are to be used in managing all properties within the rating boundaries, to render services and make the place livable.
For Land rents, they could be an actual figure to pay or/but overtime the rents have appreciated. In fact, Land rents have been increasing over time that it has come to a point where it is a collection of the government revenue and the rents have been going up.
Once you have registered your land at the ministry of lands using your title deed number, full name, ID number and Land rent amount as it appears in the title, you can pay your Land rents using your land reference number and ID number and you will receive an SMS with payment options.
The importance of registering your rental land on the system is that you will be notified if and when someone conducts a search on your parcel of land which is very helpful in an era of land grabbing.
5. What happens if one doesn't pay their Land rates for a long period of time?
After the month of March, there is a penalty. The penalty will accrue monthly up until payment, usually 2%/3% of the rates.
6. How do you avoid buying land with Accrued rates and rents?
When buying land, it is advisable to hire a property lawyer. Property lawyers should look at the area and should not allow their clients to take on a property that comes with obligations that have not been dealt with. This can be done by asking the seller for a Land rates clearance Certificate as well as a Land rent clearance Certificate -for leaseholds.
Finally, if the seller does not have the cash to pay for the Accrued Rates or/and Rents, they can get into an arrangement with the buyer and deduct the amount from the selling price so that they can assist in paying. But it is the obligation of the seller who has been the landowner.