Nairobi landowners set to pay double rates January

Nairobi City skyline. FILE PHOTO | NMG

Property owners in Nairobi will from January pay up to double the current land rates as City Hall seeks additional levies from landowners to match the rally in land costs over the past 42 years.

City Hall yesterday issued a notice that the new rates, which were approved in the Finance Act for the year to June 2022, will apply from the start of the year. The new rates would be based on 0.115 percent of the current value of undeveloped land, setting the stage for costly levies and possible rise in rent as landlords move to recover the additional costs.

Currently, property owners pay land rates at 25 percent of the unimproved site value based on the 1980 valuation roll, which City Hall says has seen it lose on the appreciation of plots. The new rates will apply to residential, commercial and agricultural plots within the capital city.

Further, for lands not exceeding 0.1 HA, a flat rate charge of Sh2,560 will apply while for land greater than 0.1HA and not exceeding 0.2HA, the owners will pay Sh3,200 annually.

On the other hand, for land greater than 0.2HA and not exceeding 0.4HA, a charge of Sh4,000 will apply and land exceeding 0.4HA will attract a land rate of 4,800.

“Exemption 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 acting County Secretary Dr Jairus Musumba said in the notice

Consequently, the county targets to more than double its land rates collection to over Sh6 billion.

City Hall is seeking to cash in on the sharp appreciation of land in Nairobi over the past two decades on an increased appetite for real estate deals.

Land prices started rising in 2003 after a new government came to power promising change following a 24-year Moi era characterised by a poor investment climate. The price of an acre of land in Nairobi’s Upper Hill business district ballooned to Sh492 million from Sh120 million in 2010 and Sh50 million in 2002, property dealers say.

In the financial year ending June 30, 2021, City Hall collected Sh2.76 billion from land rates against a target of Sh5 billion. City Hall is set to map its ratable properties through the implementation of the Geographical Information System (GIS)-based valuation.

This will see the number of ratable properties in Nairobi increase from the current 161,000 to about 300,000 properties.

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