Nairobi’s costly land rates move closer to reality

City Hall has announced a schedule for public input into the new property valuation roll, bringing the costly land rates closer to reality.

In a joint public notice, acting Nairobi County Secretary Jairus Musumba and assembly Speaker Benson Mutura said the public participation fora will be conducted on June 16 between 9am and 1pm across the 17 sub-counties in the capital. The new draft valuation roll proposes the new rates to be based on between 0.1 and 0.115 per cent of the current value of undeveloped land, setting stage for costly levies.

Currently, property owners pay land rates at 25 per cent of the unimproved site value based on the 1980 valuation roll, which City Hall reckons has seen it lose on the appreciation of plots.

In February, Lands and Urban Planning Executive Charles Kerich said property owners will definitely start paying higher rates compared to the current rates once the new valuation roll comes into effect.

He said the public participation will inform the final percentage to be charged as rates on all rateable properties in the capital.

Public participation 

The May 21 notice has further asked members of the public to submit their memorandum or representation(s) to the office of the Country Secretary or physically drop the same at the office of Speaker ahead of the public participation.

The valuation roll, tabled before county assembly in February, has been awaiting public participation to pave way for its roll-out.

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 Moi era characterised by a poor investment climate.

  Sh552 million   

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, property dealers say.

City Hall raised Sh1.97 billion from land rates in the year to June 2019 against a target Sh4.84 billion, reflecting the defaults facing the income stream, with the under-performance attributed to use of outdated rates records. 

Consequently, Mr Kerich said the old valuation had to be updated in order to capture the new prices, with the law requiring that the valuation roll is reviewed after every 10 years. However, the last review was done in 1980.

A valuation roll is a public legal document that consists of property information of all rateable properties within boundaries of a county (rating authority).

Currently, Nairobi has about 170,000 rateable properties, with rates being one of the top five own source revenue earners for the county government.

The process to develop a new valuation roll began during former Governor Evans Kidero’s regime in 2016.