Government’s proposal to hike land fees stirs uproar
Plans by the government to hike land rates have been met with uproar from the public and developers who now want the proposal reviewed to align it with the current economic times.
Kenyans who described the proposal as unrealistic at a time when the country is struggling with a crippled economy and a difficult business environment asked the government to increase the rates in portions to avert paralysing land development.
Among rates that have elicited sharp opposition from the public include a proposal to increase the fee for application of an official land search from Sh500 to Sh2,000 and a consultation fee for those seeking professional advice on physical planning matters to pay Sh5,000 per hour for such services.
In the proposals by Lands Cabinet Secretary Alice Wahome, Kenyans who wish to undertake a topographical survey will now be required to part with Sh30,000 up from Sh15,000 while surveyors intending to apply for a practising licence will now be required to pay Sh20,000 if the new bill becomes law.
Wahome proposes to amend among others: Registration of Documents Act, Land Control Act, Land Registration Act, The Land Act, The Community Land Act, and the Sectional Properties Act.
According to the CS and should her proposals see the light of day, registration of land documents will now be charged at Sh1,500, while corporation certificates in the land ownership process will cost another Sh1,500. Kenyans and land developers have rejected the new rates which the government hopes will help cast its revenue net wider, calling for considerations of poor economic times, joblessness and reduced access to money.
While the government maintains that some of the fees prescribed by the statutory instruments have remained unchanged for 30 years, Kenyans want the government to drop the plan so as to woo more investors into the country and enable more of them to own land for faster achievement of its affordable housing agenda.
Led by John Mungai, a bodaboda operator with aspirations to own land, Kenyans who spoke to the Business Hub regretted that most of them and especially those in the informal sector will be locked out from owning land and consequently homes should the government continue with its plan to hike various land-related services.
“While the government wants to collect billions of shillings from the essential services, Kenyans will be unable to do land transactions at all therefore leading to reduced revenue streams. We want to grow from the bottom-up but with the increased taxes, life might turn us in a different direction,” he said.
Also against the proposed increases are players in the real estate sector, saying the move will not only impoverish Kenyans seeking to buy land and homes but will also scare potential investors who are key in turning around the country’s economy.
Led by Dhahabu Lands Limited Managing Director Peter Kamau, the sector stakeholders urged the government to be considerate of the current economic situation in the country before it revises the land taxes upwards.
Speaking while issuing 3,000 title deeds to the firm’s investors in Juja, Kiambu County, Kamau said while taxes are imperative for the country’s economic growth, the government should consider gradual increment of the land fees so allow Kenyans who are grappling with the high cost of living access the crucial services.
“As players in the real estate sector under our umbrella body, Association of Real Estate Stakeholders, we have raised the concerns to the government but we continue to urge it to yes, increase the rates but not in the proposed manner,” he disclosed.
“The government wants revenue but Kenyans also require a favourable environment to do land transactions, let us agree on terms that will favour all players,” said Kamau. His sentiments were echoed by Kamau Mutheki, managing director at Zani Properties Ltd who warned that higher land service fees could raise the overall cost of construction for housing projects.
This, he said, will in turn affect the feasibility and affordability of housing initiatives. “Higher land service fees may lead to increased costs for developers, and these costs could be passed on to homebuyers,” said Mutheki.