Embarking on a new era for apartment owners in Nairobi County, the Sectional Property Act 2021, implemented from January 2024, has introduced a mandatory requirement for Nairobi apartment owners to pay land rates starting from this month (January 2024) to the county government.
This pivotal legislation, aimed at streamlining property ownership and taxation, carries implications beyond mere payment, including penalties for non-compliance.
In this guide, we delve into the key aspects of this new landscape, covering land rates, deadlines, penalties, valuation systems, and communal responsibilities.
According to Stephen Mwangi, the Nairobi County CEC for Built Environment and Urban Planning, unit owners are obligated to pay land rates.
In a recent interview with Citizen TV, Mwangi emphasised the importance of complying with this requirement, stating that ownership has been effectively transferred to the buyer, necessitating their contribution to the county's funds. "Unit owners with titles for their units should pay rates to the county as they are registered titles," said Stephen Mwangi.
The Nairobi City County Government Finance Act 2022, endorsed by Nairobi Governor Johnson Sakaja in the previous year, sets forth land rates for residential, commercial, and agricultural properties. Landowners are obligated to pay 0.115% of the assessed value of their land.
To ensure compliance with the latest regulations, apartment owners must adhere to the annual deadline of March 31st for land rate payments.
Failure to meet this deadline will result in interest charges, with a monthly rate of three percent on the outstanding amount until fully settled. It is crucial to make timely payments to avoid unnecessary financial burdens.
In addition to individual land rates, The Act also stipulates that residents of the apartments will be responsible for paying rates for the common areas within the apartment complex.
These shared spaces, such as swimming pools, parking lots, and playgrounds, are under the management of the apartment community.
Stephen Mwangi addressed concerns about over-taxation, highlighting the government's sensitivity to citizens' economic well-being. “The value of land in Nairobi, if you look at some areas, is quite high, so the government is sensitive. It does not want to over-tax its citizens, " he added. We have gone down to a very reasonable percentage, so that you are paying almost similar to what you were paying before”
The implemented valuation system considers diverse economic landscapes within Nairobi County. Prestigious areas like Karen and Westlands are valued at Sh20 million to Sh35 million per acre, while Upperhill ranges from Sh200 million to Sh300 million per acre. Mihango, Ruthimitu, Waithaka, and Pumwani see valuations at approximately Sh20 million to Sh30 million per acre. This nuanced approach ensures fair taxation aligned with the economic statuses of different neighbourhoods.
The Sectional Property Act 2021 is bringing significant changes to the financial landscape for apartment owners in Nairobi County. Understanding and fulfilling responsibilities is crucial in light of these changes. Key aspects include land rate payments, strict deadlines, and penalties that underscore the government's commitment to fair taxation. The nuanced valuation system reflects a thoughtful approach to prevent overburdening citizens.
Embracing these changes not only fulfils legal obligations but also contributes to the broader vision of a well-maintained and economically sustainable Nairobi. As apartment residents adapt, a shared commitment to community responsibilities fosters cooperation and contributes to a thriving urban environment.
