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Section 40

Security on property for unpaid tax 

(1) Where a taxpayer, being the owner of land or a building in Kenya, fails to pay a tax by the due date, the Commissioner may direct the Land Registrar in writing that the land or building, to the extent of the taxpayer’s interest in the land or building, be the subject of a security for the unpaid tax specified in the notification to the Land Registrar:
  • Provided that the Commissioner shall notify the taxpayer in writing of the direction within seven days from the date of the notification to the Land Registrar.
(2) Where the Land Registrar has been notified by the Commissioner under subsection (1), the Land Registrar shall, without levying or charging a fee, register the Commissioner’s direction as if it were an instrument of mortgage over, or charge on, as the case may be, the land or building of the taxpayer specified in the notice.
(3) A registration under subsection (2) shall, subject to any prior mortgage or a charge, operate as a legal mortgage over, or charge on, the land or building of the taxpayer to secure the amount of the unpaid tax and the provisions of the Land Registration Act relating to the rights of the mortgagee shall apply.
(4) The Commissioner shall, upon the payment of the whole of the amount of unpaid tax secured under this section, direct the Land Registrar in writing to cancel the direction made under subsection (2), and the Registrar shall, without levying or charging a fee, record the cancellation of the direction and the direction shall cease to apply.


(1) Where a taxpayer, being the owner of property in Kenya, fails to pay a tax by the due date, the Commissioner may notify the Registrar in writing that the property, to the extent of the taxpayer’s interest in the property, shall be the subject of a security for the unpaid tax specified in the notification: Provided that the Commissioner shall, within seven days from the date of the notification to the Registrar, by notice in writing inform the taxpayer and any other person who may have an interest in the property about the notification.

(2) Where the Registrar has been notified by the Commissioner under subsection (1), the Registrar shall, without levying or charging a fee, register the Commissioner’s notification as if it were an instrument of restraint on the disposal, mortgage on, or charge, as the case may be, the property specified in the notification.

(3) A registration under subsection (2) shall, subject to any prior restraint on disposal, mortgage or charge, operate as  legal restraint on the disposal, mortgage, or charge on, the property to secure the amount of the unpaid tax, and any prior restraint shall supersede the Commissioner’s notification.

(4) The Commissioner shall, upon the payment of the whole of the amount of unpaid tax secured under this section, direct the Registrar in writing to cancel the notification made under subsection (2), and the Registrar shall, without levying or charging a fee, record the cancellation of the notification and the notification shall cease to apply.

(5) Where the taxpayer fails to pay the tax liability described in the notification under subsection (1) within two months after receipt of the notification, the Commissioner or authorised officer may, at the cost of the taxpayer, dispose of the property that is the subject of the restraint on disposal, mortgage or charge, by public auction or private treaty, or as provided for under the relevant Act for the recovery of the tax:
    Provided that where a plan has been agreed between the taxpayer and the Commissioner, the liability shall be settled within the agreed payment plan before the notification by the Commissioner is lifted.

(6) Subject to section 34, where the property is subject to a prior restraint, that prior restraint shall have priority if the property is disposed of under subsection (5).

(7) For the purpose of this section—
  • “property” means land or building, aircraft, ship, motor vehicle, or any other property which the Commissioner may deem sufficient to serve as security for unpaid taxes;
  • “Registrar” includes—
    • (a) the Land Registrar defined in section 3 of this Act;
    • (b) the Registrar of Ships appointed under section 14 of the Kenya Maritime Authority Act, 2006;
    • (c) the Director-General of the Kenya Civil Aviation Authority appointed under section 19 of the Civil Aviation Act, 2013;
    • (d) the Director-General of the National Transport and Safety Authority appointed under section 15 of the National Transport and Safety Authority Act, 2012; or
    • (e) any other person who the Commissioner is satisfied has authority to hold property sufficient to serve as security for unpaid taxes;
  • “relevant Act” includes the Kenya Maritime Authority Act, 2006, Merchant Shipping Act, 2009, Civil Aviation Act, 2013, Land Registration Act, 2012, Land Act 2012, National Transport and Safety Act, 2012, or any other Act that provides for the registration of property

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