Counties will have powers to auction assets of businesses and individuals who default on land and property rates if Parliament adopts a proposed law that aims to boost revenues for the devolved units.
The National Rating Bill, 2022 proposes to empower the 47 county governments to seize and sell the property and land of defaulters upon the expiry of a 60-day notice to clear their dues.
Counties are currently not allowed under the law to seize and auction the property of defaulters, forcing them to rely on the issuance of waivers to woo property and land owners to clear unpaid rates.
The property and land rates will be reviewed every five years and counties will only be allowed to retain the charges for a maximum of two years under the Bill that seeks to earn counties billions of shillings more in revenues.
“The county government may for the purpose of recovering the rates due auction the rateable property at the current market value in accordance with the provided procedures to recover the rates due,” read the Bill.
Prices of land and houses, especially in urban centres, have been surging in recent years on growing demand but counties use valuation rolls based on outdated ratings and laws denying them additional revenues.
The proposed law also seeks to rope in counties as part of listed beneficiaries for cases where the property is under succession besides attaching debts to recover the money.
The government-backed Bill is part of efforts by the National Treasury to increase internal revenues for regional governments amid years of underperformance.
Counties have since the start of devolution in 2013 turned to issue waivers in a bid to boost compliance with the reliefs denying them billions of shillings in internal revenues.
