Landowners in Nairobi are set to start paying higher rates as City Hall revealed a new higher valuation charge based on current property value.
The new land rates will be based on 0.13 percent of the current land value, setting the stage for costly levies for property owners in the capital.
Currently, property owners pay land rates at 25 percent of the unimproved site value based on the 1980 valuation roll, which City Hall reckons has seen it lose on the appreciation of plots.
Nairobi County Finance Executive Allan Igambi, while reading the city county’s budget statement and Finance Bill, 2021 yesterday, said the new rate is aimed at increasing revenue from land rates from the current Sh2.8 billion to about Sh6 billion annually.
City Hall seeks 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.
Further, Mr Igambi pointed out that 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.
“The completion and implementation of the GIS-based valuation roll will result in capturing all properties and rates charged based on the current land value, a departure from the current state where rates are charged as per the 1980 valuation. This will automatically double the rate income,” said Mr Igambi.
The plan by City Hall to revise upwards the land rates has faced opposition from Nairobi residents, with concerns raised on its implications.
City Hall is seeking to cash in on the sharp appreciation of land in Nairobi over the past two decades on 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 rule of President 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.