Residents in six towns and urban centres are staring at double pain inform of increased rents and deduction of housing tax, as the government seeks to revise land rates upwards.
The move will likely force landlords to adjust rental costs.
This is after the National Assembly passed a Report of the Lands Committee on the National Rating Bill No55 of 2022 that will see land rates in Nairobi, Mombasa, Nakuru, Kisumu, Eldoret and Kiambu reviewed upwards.
Following the adoption of the recommendations, county governments will now need furnish the ministry of lands with the criteria for the determination of categories of rateable properties in the devolved unit.
This is among the criteria that the state will use in determining the amount of land rent rates that owners should remit and those that will be exempted from paying the levies.
The review comes after the National Treasury approved the Ministry of Lands' request for a review as the government looks to net an additional Sh8 billion from the sector.
If revised upwards and landlords pass the same to the tenants, will come as a blow to many Kenyans less than a month after landlords refused to lower rent, citing government cushion as too little to warrant reduction.
The report says that the lack of updated valuation rolls has been a challenge in most counties.
A valuation roll is a register of rate able properties showing information such as the rate able owner and key information to be featured in the roll. The roll forms basis of property rates payable.
“Under existing Acts, valuation rolls should be prepared or updated every 10 years, this has never been achieved with most counties running multiple rolls while those that have prepared valuation rolls, implementation have been challenged,” the report reads in part.
According to Lands Principal Secretary Nixon Korir, the ministry has received Sh150 million from the Treasury to review land rates and rent in the cities of Nairobi, Mombasa, Nakuru, Kisumu, Eldoret, and Kiambu because the rates now in use are out of date.
Currently, Kenya uses the Rating Act of 1963 and the Valuation for Rating Act of 1956, which according to the PS have denied counties billions of shillings in funding as real estate prices have increased over time.
The government receives only Sh3 billion a year in land rent and rates that haven't been updated in decades. In the fiscal year ending June 2023, the Ministry managed to collect Sh832.6 million in land rent revenues, surpassing the initial goal of Sh210.5 million.
Based on from the ministry the government collected Sh4.9 million in conveyancing fees against a budget of Sh8.9 million.
While Land Valuation fees reached Sh6 million compared to the target of Sh55.4 million, the Ministry successfully obtained Sh54 million from Land Registration fees.
As of June 30, 2023 the State Department for lands had achieved revenue collection totaling Sh1.69 billion, surpassing the set target of Sh1.42 billion.
Property rate denotes a tax calculated on a property's value, encompassing land. It is typically assessed by a rating authority in conjunction with a valuer's expertise.
