Nairobi Governor Johnson Sakaja hopes to raise Sh19 billion from new land rates announced recently.
In the last three years, the county has been collecting about Sh2.5 billion in land rates. Property owners pay 25 per cent of the unimproved site value based on the 1980 Valuation Roll. The collection is against a target of Sh5 billion.
In an interview with The Standard, Sakaja said the 1980 Valuation Roll has been overtaken by events given the monumental development in the city as opposed to over four decades ago.
"There has been a huge growth in the city properties that has forced us to review the rates. Currently, some landowners pay a pittance for multimillion properties. We want to ensure what people pay is commensurate with the current value," said Sakaja.
Under the Sectional Property Act passed by the assembly, Sakaja says he hopes to collect cash short of Sh20 billion that will help the county improve services across the 17 sub-counties.
Under his target, Sakaja notes that the land in Nairobi has developed massively over the four decades with a significant jump in the last 25 years.
Early in the week, the county put in the Kenya Gazette the new rates that will be implemented from January 2024. The new rates will apply to residential, commercial, and agricultural plots within the capital city.
Sakaja said they will use the implementation of the Geographical Information System (GIS)-based valuation to help them set a map that will capture all its rateable properties in the capital within its county boundaries.
Currently, the city is only billing about 150,000 lands but targets to increase this to over 500,000 properties.
In the notice, the new rates would be based on 0.115 per cent of the current value of undeveloped land, setting the stage for costly levies and a possible rise in rent as landlords move to recover the additional costs.
Before January 2023, rates were levied based on the 1980 Valuation Roll with the rates structure varying between 2.25 per cent in 1982 to a high of 34 per cent.
The land rates levying are guided by the Valuation for Rating Act, Cap 266, and the Rating Act, Cap267
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.