PROPERTY TAX

Land rates should make Nairobi self-sufficient

In Summary

• The World Bank estimates that only a quarter of properties in Nairobi are paying any land rates

• The rateable values are 40 years old so land tax assessments are far too low

Nairobi county officers close a building on Dubois Road on February 24 whose owner defaulted on land rates totalling Sh319,204.
PAY UP: Nairobi county officers close a building on Dubois Road on February 24 whose owner defaulted on land rates totalling Sh319,204.

This year a new digitised property valuation system will be rolled out to manage land rates in Nairobi (see P23).

Nairobi county government and Nairobi Metropolitan Services are expected to dramatically increase revenue collection because valuations are still based on 40-year old assessments rather than present-day values.

In addition, the valuation system will extend its reach as the World Bank estimates that today only a quarter of properties in Nairobi are paying land rates.

 
 

And digitisation will ensure that rates are fully collected.

This is a very positive development. It is crazy that central government still has to financially support Nairobi county. In most countries, the capital city is self-sufficient because of the high value of real estate and huge rate collections. Often capital cities are not allowed to keep all the rates they collect.

Property valuation is also an equitable tax. You pay a percentage of the value of the real estate that you own. Poor people will pay very little, rich people will pay a lot more.

Properly managed, this new rating system can make Nairobi financially independent. It can become a better and more beautiful capital for Kenya.

Quote of the day: "The target of anything in life should be to do it so well that it becomes an art."

Arsène Wenger
The French football manager was born on October 22, 1949