• In 1980, an acre in Karen was valued at between Sh300,000 and Sh900,000 compared to the current value of between Sh40 million and Sh60 million.
• The new system will increase the number of properties in the supplementary valuation roll by 5,000.
A new property valuation system will be rolled out to determine land rates in Nairobi at a cost of Sh160 million.
It is expected that the joint effort of the county government and the Nairobi Metropolitan Services will increase the number of properties in the supplementary valuation roll by 5,000, according to county Finance executive Allan Igambi.
The plans are contained in the County Annual Development Plan for the 2020-2021 financial year.
“During the FY 2019-2020, the department of valuations and property management was able to complete the development of the county’s GIS-based mass valuation roll which will be implemented from the FY 2020-21,” Igambi says.
A valuation roll contains information on all rateable properties in an urban centre.
The geographical information system-based mass valuation now before the Nairobi County Assembly, will be used to value property based on the market value and rates.
Under the about-to-be retired valuation roll, which was introduced 40 years ago, Nairobi has been charging rates at 25-34 per cent depending on location. Land rates are levied based on the value of the unimproved site as per the Rating Act enacted on May 11, 1956.
In 1980, an acre in Karen was valued at between Sh300,000 and Sh900,000. The current value ranges from Sh40 million to Sh60 million depending on the location.
The comparative cost of an acre in Upper Hill was valued at Sh435,000 in 1980 and Sh500 million-Sh600 million currently.
In the proposed 2019 valuation roll, a total of 24,780 properties have been added to the rating database since 2013, taking the tally to 156,000.
City Hall began reviewing its 1980 valuation roll in October 2016 when it contracted Geomaps Africa to do the job alongside 11 of its valuers.
Property owners have been paying rates on unimproved site at between 25 and 34 per cent depending on location.
The updating of the valuation roll will translate into more revenue for City Hall.
“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property roll is estimated to cover less than a quarter of the total properties, and values are now almost 35 years out of date.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.
The county loses at least Sh188 billion in uncollected land rates every financial year, a Commission on Revenue Allocation report released this year shows.
In the financial year ended on June 30, Sh1.9 billion was collected in land rates against a target of Sh3.9 billion.
A 2018 County Fiscal Strategy Paper shows that the devolved unit 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 underperformance 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.
- mwaniki fm