Leasehold properties

From routine enquiries, one appreciates that some leaders aren’t yet sufficiently informed about the proposed annual levy on freehold land in the amendments pending enactment by parliament. Let’s close this gap. Holders of leasehold properties in rateable jurisdictions in Kenya currently pay annual rates. In addition, those who are lessees to government, meaning that they have been leased the land for a term of years by either the county or national government, pay an annual rent. This is the rent that they pay to the government every year as the owner of the land, or the lessor, under a mutual contract.

Freehold properties

Annual land levy on freehold land

Through the Land Laws (Amendment) (No 2) Bill of 2023, the Government intends to have owners of freehold land within urban or city areas pay an annual land levy on freehold property. Sitting right inside the plethora of amendments proposed through the Bill, this seemingly mundane clause is easy to miss, but yet has grave implications to the affected property owners. Section 51 of this Bill seeks to amend Section 54 of the Land Act by inserting a new section 54A with this new requirement. Members of Parliament must beware the implications of this provision to themselves, and Kenyans with freehold properties within urban or city boundaries. They must reject the proposal. This is why.

Ancestral land and basic livelihoods

A recent story by the sister ‘Daily Nation’ newspaper revealed some humbling statistics on the historical land injustice claims made to the national land commission. Of the 3,743 cases received, 2,624 of them, a whopping 65%, are from Kenya’s Coast, with 2,024 of them coming from Kilifi County alone! Speaking during a Land Injustices Dialogue Session in Garsen, Tana River County, Commission Chairman Gershom Otachi indicated that the claims from Coast are comparatively weighty since they involve large communities, while those from other areas largely involve individuals, or much smaller groups. Good luck to the Commission as it decides on these cases.

Tenure certainty good for co-existence and investments

I have been watching spaces which are home to fragile land injustice claims by individuals and groups. Often, the resolve by the claimants is deep, cold and long-term. Any provocation, particularly by those prospecting for land, is met with hostility and force. Despite the pressure for land in Kenya, such spaces should be avoided. I have always advised investors to keep off such land till the pertinent issues are resolved. Once that’s done, then they may freely plough in capital for land or property. Such restraint is necessary where disputes, or confrontation over multiple claims to land are likely. Hence reason why there is need for urgency in adjudicating over historical land injustice claims already received, and those pending, be they by individuals or communities. Only then shall we have land tenure security in such zones. Certainty and security of tenure rights incentivizes the property market, paves way for long-term human settlement and provides an optimal environment for infrastructural development.

Land Control Boards were established under the Land Control Act to regulate transactions in agricultural land. Sellers and purchasers of agricultural land have had mixed experiences with these organs. Some not good at all. They have their good side too. Many have prevented the secretive sale of matrimonial land by proprietors out to do so without the knowledge of their spouses in rural Kenya. The Boards also bear the duty of preventing the unwarranted fragmentation of agricultural land. However, in most parts of Kenya, they have not been effective enough on this.

Land Control Bill, 2023

Land Control Boards may now be abolished if a Bill introduced in the National Assembly by Hon Wilberforce Oundo, Member of Parliament for Funyula, sails through. Dr Oundo, a land economist and once a senior official of the Institution of Surveyors of Kenya, certainly knows why he seeks to have the Land Control Act repealed. His Bill, the Land Control Bill, 2023, is not new. He had introduced it in the 12^th Parliament, which adjourned sine die before the Bill could be processed. The Bill, now Gazette Supplement No. 124 of 28^th July 2023, is back as Bill No. 39 of the National Assembly. It matured on 10^th August 2023 and will now proceed to the other phases of consideration in keeping with procedure. The principal object of the Bill is to repeal and replace the Land Control Act and to align the law governing dealings in agricultural land with the provisions of the 2010 constitution, the Environment and Land Court Act under which disputes are determined, and the Land Registration Act, under which all titles to land in Kenya are registered nowadays.

Major tax hike

The government, through the Finance Act 2022, amended the capital gains tax as provided for in the Income Tax Act from 5% to 15%. This is good for government, which seeks to seize any opportunity to enhance the revenue basket. However, the tripling of the tax shocked those targeted, and could beget the taxman mixed results.

Tax applicable to land and buildings