Nairobi rejects new levies to be charged on construction

Governor Evans Kidero. [PHOTO: FILE/STANDARD]

NAIROBI: The Nairobi County Government has objected to a 0.5 per cent construction levy by the Ministry of Lands Housing and Urban Development noting that it was self-defeating and negates plans to grow home ownership not just in the county but the entire country.

Governor Evans Kidero said the charge could result in investors putting their money in other sectors, despite the fact that the county is in dire need of new housing projects to meet growing demand.

The levy is contained in the National Construction Authority (NCA) Regulations published in June by Lands Cabinet Secretary Charity Ngilu. NCA is supposed to charge a 0.5 per cent levy on houses that are Sh5 million and above.

Kidero said the regulations were drafted without the ministry consulting the county governments, despite housing being an issue within their jurisdiction.

"This levy affects the housing sector that falls within the jurisdiction of the county governments and it should have been prepared with our participation and concurrence. This levy is bound to impact heavily on housing, as well as push up the cost of providing urban technical services, which would in turn impact negatively on the ability of the county government to expand infrastructure services for development," said Kidero in a letter addressed to Ngilu.

The letter was also copied to the Senate Committee on Energy, Roads and Transport Parliament's Transport, Public Works and Housing committee.

Kidero added that the Nairobi County Government and other counties were currently experiencing serious housing shortages and poor infrastructure and the levy would go against the State's obligation to provide citizens with adequate and affordable housing.

"There are already numerous levies and charges imposed on the housing and construction sectors and this latest move will only serve to discourage investment in the sector," he said.

Nairobi County has been trying to engage various developers with a view to interesting them in large scale housing and other infrastructure projects including "the Eastlands Urban Renewal project".

Kidero asked the Government to revoke the levy as it would not only affect investments, but also deny Nairobi residents the right to adequate and affordable housing and infrastructure.