Property deals boost as private firms allowed to do valuations

Private valuers will now be allowed to process property deals for the purpose of stamp duty in a historic shift that will speed up transfer of land and buildings.

Treasury secretary Ukur Yatani has, through a fresh subsidiary legislation, allowed chief government valuer to appoint private practitioners to conduct property valuation on behalf of the government.

The move follows nearly 20 years of agitation by property dealers who have argued that a “small pool of valuers” provided by the Ministry of Land was not evenly distributed across the country.

The ministry’s under-staffing, property professionals have long held, slows down the turnaround time for completion of property deals and sometimes results in overvaluation and undervaluation of land.

The Stamp Duty (Valuation of Immovable Property) Regulations 2020 now give property buyers the option of either using civil servants or hiring an approved valuer, offering employment opportunities to valuation professionals outside civil service.

Mr Ibrahim Mwathane, the chairman for privately-run Land Development and Governance Institute, described the new rules, as “fundamental and transformative for all land transactions that require valuation for stamp duty”.

“By excluding private valuers from valuations for stamp duty, transfers of immovable property (land) have always suffered avoidable delay, since government valuers have had challenges coping with the routine workload,” Mr Wathane, who headed Institution of Surveyors of Kenya (ISK) between 2003 and 2005, told the Business Daily.

“If the regulations are effectively implemented, one would expect a reduction in the turnaround time for transfer transactions countrywide, since there will be more valuers available to deal.”

Stamp duty — charged on transfer of buildings and land at the rate of four percent in towns and two percent in rural areas— is a major source of revenue for the government. For instance, the Treasury has set a goal of Sh11.27 billion in stamp duty collections this financial year ending June 2021, slightly reduced from an estimated Sh11.38 billion in the year period through June 2020 amid a soft property market.

First-time home buyers are, however, spared the tax following changes to stamp duty Act mid-2018.

Under the new rules, an appointed valuer will be required to submit the valuation report to the chief government valuer immediately the buyer has made the payment while a government valuer has 21 days from the date application.