The Freemasons’ Hall in Nairobi, which last year disputed a Sh19 million land rates bill from City Hall because it was legally exempt, could now face renewed scrutiny under a new framework that narrows the categories of properties eligible for relief.
Nairobi Governor Johnson Sakaja’s Cabinet has approved a new application process for property owners and institutions seeking exemptions from land rates following changes introduced by the National Rating Act, 2024.
Nairobi County Governor Johnson Sakaja appears before the Senate Committee on National Security at Bunge Tower, Nairobi, on Thursday, July 23, 2026, to respond to an inquiry into the county government's firefighting and disaster management preparedness.
Photo credit: Dennis Onsongo| Nation Media Group
The law, which came into force in December 2024, repealed the previous Valuation for Rating Act and the Rating Act, revising the categories of properties eligible for exemption.
Under the new framework, private schools, universities and colleges, hospitals, sports clubs, student hostels and charitable institutions previously covered by broader exemptions will now be liable for land rates unless they qualify for an exemption under the new law.
The changes could also affect commercial properties owned by religious and charitable organisations as City Hall shifts its focus to how land is actually used rather than the status of the institution that owns it.
Last year, City Hall intensified its crackdown on organisations it accused of failing to pay land rates, claiming that Freemasons’ Hall owed Sh19 million in cumulative arrears.
The facility disputed the claim, arguing that its organisation was legally exempt from paying the rates. The new framework brings the treatment of such properties into focus, particularly where land is used for commercial purposes.
“While the repealed laws covered hospitals, schools and outdoor sports grounds, whether public or private, provided the land was not used for profit, the new law limits these exemptions to specified public facilities,” the Cabinet dispatch states.
During its meeting on Tuesday chaired by Governor Sakaja, the Cabinet resolved to implement the revised framework and invited affected property owners to seek guidance from the county government.
Landlords leasing property to foreign embassies and diplomatic missions will also be liable for rates where the properties remain registered in their names.
However, the law retains exemptions for specified public and other protected uses. Under Section 38, these include land used for public religious worship, cemeteries, crematoria, burial grounds, public health facilities, public educational institutions, libraries, museums and public outdoor sports grounds.
Land used for dams, wayleaves and national monuments is also exempt, while freehold agricultural land falls outside the Act. Land used exclusively for public purposes, including roads, utilities and parks, is not subject to county rates.
Religious institutions will retain exemptions for land used for public worship but commercial developments on the same property, including shops and rental apartments, will be liable for rates.
“Places of worship remain protected and rightly so. But a block of shops or flats on the same compound is a business and the law now treats it like one,” Mr Sakaja said, commenting on the Cabinet resolution.
Nairobi County Chief Officer for Revenue Tiras Njoroge said the new framework places greater emphasis on the actual use of land, with the treatment of intended use to be addressed through regulations issued by the Cabinet Secretary responsible for Lands.
The county’s lands sub-sector will receive applications and verify the use of properties, including through site inspections. Applications should be submitted to the County Executive Committee Member responsible for Lands at City Hall.
Applicants must provide their plot or land reference number, rates account number, proof of ownership and the specific provision of the Act under which they are seeking an exemption. They must also submit evidence of the property’s current use, such as registration documents, photographs or a site plan.
Where land serves multiple purposes, applicants must clearly identify the portion for which an exemption is sought.
The county has urged property owners to submit their applications before the 2027 land rates billing cycle begins on January 1.
However, previously exempted properties should note that land rates have been accruing from the date the National Rating Act, 2024, came into operation.
