• In the 2019 draft valuation roll, the administration had considered 0.1 percent and 0.115 per cent of present value before settling on the latter.
Landowners in Nairobi will soon start paying almost double the current land rates as proposed in the Nairobi County Finance Bill, 2021.
Property owners pay land rates at 25 per cent of the unimproved site value (USV) based on the 1980 valuation roll, which City Hall estimates has seen it lose on the appreciation of plots.
However, as part of new charges contained in the Nairobi City Finance Bill, 2021, land rates will be charged at 0.115 per cent of current property value, setting the stage for costly levies.
New rates are aimed at increasing revenue from the current Sh2.8 billion to about Sh6 billion annually.
Nairobi County Assembly Budget Committee chairman Robert Mbatia said the new levies will take effect once approved b y the assembly and assented to by Governor Ann Kananu— or 14 days after publication of the Bill in the Kenya Gazette.
Highlighted in the 2019 draft valuation roll, the administration had considered with 0.1 per cent and 0.115 percent of present value before settling on the latter.
This means that agricultural, commercial and residential plots. in accordance with the 2019 draft valuation roll, will pay 0.115 percent of USV per year based on new rates.
A valuation roll is a public legal document containing property information of all ratable properties.
For land larger than 0.2ha and not exceeding 0.4ha, the owners will part with Sh4,000, while owners of those larger than 0.4ha will pay Sh4,800.
Land owners with property not exceeding 0.1ha (0.98 acres) will pay Sh2,560 annually and those greater than 0.1but not exceeding 0.2ha will pay Sh3,200.
“Exemptions will be taken if the new rates are lower than the current rates; then the current rates will apply. But if the new rate is more than double the current rates, then only double the current rates will be levied,” the document reads.
City Hall is seeking to cash in on the sharp appreciation of land over the past two decades as development increases.
Land prices started rising in 2003 after a new government came to power promising change following a 24-year rule of President Daniel Moi, characterised by a poor investment climate.
The price of an acre of land in Nairobi’s Upper Hill business district ballooned to Sh552 million from Sh120 million in 2010 and Sh50 million in 2002.
City Hall began reviewing its 1982 valuation roll in October 2016 when the World Bank contracted Geomaps Africa to do the job alongside 11 of its valuers.
The aim was to update the 1980 roll with the new valuation roll integrated with a fully automated Geographic Information System transiting property management from manual to digital system.
The new method has increased the number of ratable properties in Nairobi from the current 161,000 to about 300,000 properties.
Land rates is the top own-source revenue earner at City Hall ,accounting for about 25 per cent of revenue collected by the county .In the financial year ended June 30, 2021, City Hall collected Sh2.76 billion from land rates against a target of Sh5 billion.
City Hall is seeking to raise Sh19.8 billion from own source revenue in the financial year ending June 30, 2022, to fund its Sh39.63 billion annual budget.
(Edited by V. Graham)