Nairobi imposes Sh60,000 fee for property evaluation

City Hall will start charging Sh60,000 for evaluating real estate designs if the Nairobi Finance Bill is adopted.

The fee will be for offering technical opinions on preliminary property designs ahead of getting approval for building of homes and office blocks, a service City Hall has been offering for free.

This is yet another cost for the property market that has recently witnessed increased activity as investors pump in billions of shillings to cash in on rising home prices and rental income.

Developers are also expected to pay a levy of 0.5 per cent of the value of the contract to the National Construction Authority (NCA) and 0.1 per cent of project cost for environmental impact assessment.

The Mining ministry has also started collecting a two per cent royalty on construction materials, increasing the cost of quarry stones, concrete blocks, hardcore, ballast and sand.

Lands, Physical Planning and Housing chief officer Rose Muema said City Hall’s input is needed before property owners can commit millions in developing detailed architectural and engineering plans.

“This is important for such developers before they engage the services of architects to do the detailed development application that could cost them millions. It’s always important to get that opinion for big projects before you start,” Ms Muema said.

Previously offered as a free service, all one had to do was provide schematic drawings, which the county’s planning department analysed and offered an opinion on whether the project was sound, needed some adjustments or cannot be approved.

Ms Muema said a lot of man-hours are put into the process, which has informed introduction of the fee.

She said the design drafts have to be taken through departments such as engineering, planning and fire, before a final opinion is given.

Nairobi has over the last decade experienced a construction boom with office blocks, gated estates and commercial parks coming up in increasing rapidity.

In 2013, the value of building plans approved in the city was Sh190.6 billion. All these fall in the category that this charge is targeting and will see City Hall raise extra millions to finance its operations.

Those who lose vital planning and development documents will also now have to pay a Sh10,000 fee to have them certified.