Property assessment for rating purposes in Kenya a case study of Mavoko municipal council.

Abstract

Property assessment for rating purposes has been practiced in Kenya for over a century. Property taxation is a major source of local authority finance though its full potential has not being realized. The revenue received from property taxes is used for provision of services to residents within a local authority’s jurisdiction Lack of realization of full potential of the property tax is blamed on inefficiencies in the local authorities as a result of poor property tax administration. This project begins by tracing the rating system in various countries. The particular issues of property assessment for rating purposes in Kenya are looked at in detail. Generally lack of adherence to statutory valuation cycles and non- availability of funds in the local authorities for valuations and revaluations has contributed to long delays in property assessment for rating. This fact coupled with the first growing property market within the municipalities has resulted to greater disparity of the assessed values in the valuation roll and their respective current market value. This has led to problems of underassessment hence loss in land taxation revenue by the local authorities. Mavoko Municipal Council was chosen as the case study for this project. It is a rapidly growing municipal council within the metropolis of Nairobi City, ,jn order to enable comparisons of some important rating issues data was also collected in Kiambu, Nyahururu and Ruiru municipal councils. Private valuers also contributed valuable data for use in this project. Many writers have looked into the issue of property tax hence emphasizing its importance. Literature has been reviewed to establish the contribution of writers to the issue of property taxation and its administration. Data from the research was analyzed and presented in tables and graphs so as to make it easy to understand the findings. The findings indicate that the underassessment caused by delayed preparation of valuation roll is a major property tax administration issue in Kenya. Ad valorem property tax system can only benefit the revenue base of local authorities if this issue among others are addressed administratively Several recommendations have been suggested which if adopted could assist in addressing the issues raised. This would in turn contribute to more revenue for the local authorities which would then result in improved provision of the much needed services