• City Hall has since 1980 been charging rates at 25-34 per cent depending on property location.
•The new rates will be effected from January next year.
Image: EZEKIEL AMINGA
The Nairobi county government expects to collect more revenue from January 2020 following the introduction of a new valuation roll on Monday.
Property owners will pay higher rates to City Hall. Under the just-about-to-be retired valuation roll, which was introduced 39 years ago, the county has been charging rates at 25-34 per cent depending on location.
A valuation roll contains information on all rateable properties in an urban centre.
According to County's Executive Member for Finance Charles Kerich, the new rates will be applicable as from January 2020.
“Five years ago, through funding from the World Bank, we started the process of coming up with a new valuation roll. The new valuation roll is now ready,” County's Finance executive Charles Kerich said.
In 1980, an acre in Karen was valued at between Sh300,000 and Sh900,000 depending on the location.
Currently, the same property is valued between Sh40 million and Sh60 million, but the selling price is double that amount.
In the same year, an acre in Upperhill was valued at Sh435,000. Today it is worth Sh500-Sh600 million.
The county says it cannot continue charging the 25-34 per cent rate using the new valuation rates because it will be too high.
"We will, therefore, analyse the data from the new valuation roll to come up with proposals for consideration," Kerich said.
Currently, land rates are levied based on the value of unimproved site. The rates are based on the Rating Act which was enacted on May 11, 1956.
In October 2016, City Hall began reviewing its valuation roll.
It contracted Geomaps Africa, a valuation firm to undertake the process alongside 11 of its valuers.
Property owners have been paying rates on unimproved site at between 25 and 34 per cent depending on location.
Plots in the Central Business District and high-end locations like Karen attract higher charges than those in Eastlands.
The updating of the valuation roll will translate into more revenue for City Hall. Sources say the county has been losing billions of shillings due to outdated records.
“Nairobi’s property roll is estimated to cover less than a quarter of the total properties, and values are now almost 35 years out of date. Realising the full potential of property rates will require complete reconstruction of the fiscal cadastre,” the World Bank said in a March 2016 report.
In the County Fiscal Strategy Paper (CFSP) of 2019, City Hall said it would enhance strategy to leverage on the digitisation of rates to make it easier for customers to obtain bills and pay online.
The issuance of title deeds especially in Eastlands was aimed at attracting more landowners on board to pay rates.
The 2018 CFSP shows that the county collected Sh2.3 billion against a target of Sh5.5 billion from rates.
This was Sh847 million short of the previous financial year when Sh3.1 billion was collected.
In the 2017-2018 fiscal year, City Hall collected Sh1.87 billion against a target of Sh4.84 billion.
The under-performance was attributed to a lack of effective enforcement mechanisms of rate defaulters and use of outdated rates record.
Also blamed were court injunctions by resident associations on land rates collection.