Nairobi property owners might start to pay taxes

Tuesday December 19 2017

taxes on property owners

Nairobi Governor Mike Sonko (left) and his deputy Polycarp Igathe go through a document during a meeting with Matatu owners at Nairobi Charter Hall on August 29, 2017. Mr Igathe has proposed new taxes on property owners. PHOTO | ANTHONY OMUYA | NATION MEDIA GROUP 

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Property owners in Nairobi may soon start to pay taxes on both their land and the development on them to boost revenue, Deputy Governor Polycarp Igathe proposed.

Mr Igathe on Tuesday said that only 120,000 properties are ratable yet the county has over 1.6 million buildings.

The deputy governor said in a statement that the county currently levies rates on land without accounting for the value of the buildings that sit on the property.

“Revenue collection is a disaster in Nairobi. We are not compliant, but we are all very entitled to services.

"Cities are run with property taxes and in Nairobi, these contribute 36 per cent because compliance is very low. We are fixing this through digitisation and amending the valuation roll,” Mr Igathe said.

Land rates are a key revenue stream, which fetched Sh2.25 billion against an estimated Sh5.5 billion target in the financial year 2016/17, a report by the Controller of Budget showed.

Mr Igathe said that the Sectional Properties Act 1987 amendments will enable City Hall to charge rates for each property.

The law would see City Hall develop a graduated rate system that accounts for the number of floors of properties.

“We will eventually eliminate cash handling and minimise human intervention to this process as only 10 per cent of properties in Nairobi pay rates.

"We are working closely with Kenya Revenue Authority, Kenya Power and Nairobi Water Company to integrate our databases and collect taxes more efficiently,” he said.

He called upon the public to support amendments to the Sectional Properties Act 1987, which separate ownership of units or sections within a complex.