Nairobi apartment owners to pay rates based on residential floors

Nairobi apartment owners to pay rates based on residential floors

Residents of Nairobi County who have purchased or rented apartments from developers will soon have to pay sectional rates in addition to value capture.

Charles Kerich, a member of the County Executive Committee (CECM), disclosed this in an interview with Spice FM on Monday, May 23.

Value capture is crucial, in Kerich’s opinion, since developers have been paying the same prices for flats as for undeveloped land.

Value capture, according to the CECM, would guarantee land charges were equitable and broaden the county’s revenue base.

“Let us take, for example, you have one acre in Upper Hill; on that one acre stands a tower with 50 storey paying the same as that one acre next door that has nothing,” he began.

Kerich said that because they were using water and sewage services in addition to a road network, everyone in that building had to pay rates based on the floor they occupied.

“You are not going to subdivide this one acre, but you can capture the value of each floor so that every owner of each floor pays rates as well.”

Regarding sectional property, Kerich said that the county was in the midst of fully putting the Sectional Property Act into practice to make sure that a small number of people weren’t responsible for paying land rates on properties that had been divided.

“What happens is if you are on one acre and you have 60 apartments, the rates charged on that land is undeveloped site value, meaning you are charged as if there is nothing on that property,” he explained of the now being phased out system.

“Assuming you have 60 apartments and you need to pay Ksh60,000, you apportion and say everyone pays Ksh1,000, but then you will find many people carrying the burden for those who refuse to pay.”

In order to prevent the developer from receiving payment in one single sum, the Act will now grant each apartment owner complete ownership of their unit.

The CECM clarified that everyone would have their own title and pay their own rates thanks to sectional property, which would protect them from being impacted by the defaults of their neighbors.

He declared that the ability to take out loans against the property without having to deal with the developer was a win for Kenyans purchasing or renting apartments.

Furthermore, the administration of Governor Johnson Sakaja will benefit because this will guarantee higher revenues.

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