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Punitive Land Rates Penalties
Rank: New-farer Joined: 1/4/2016 Posts: 67
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The annual land rates are typically very small amounts. Most counties charge Kshs 1200 while few charge Kshs 5000.
The penalties for rate defaulters is currently 3% of the unpaid arrears, compounded monthly. This compound interest raises the owed amount astronomically and very fast making it impossible for some land owners to ever settle their debt or be current.
See some worked examples.
Kamau has defaulted 1200 annual land rate at 3% monthly compound interest for 44 months. What amount does he owe? Principal land rate = 1200*4 = 4800
Amount = 1200*(1.03**44+1.03**32+1.03**20+1.03**8) = 11,183
Ouma has defaulted 1200 annual land rate at 3% monthly compound interest for 10 years. What amount does he owe? Principal land rate = 1200*10 = 12,000
Amount = 1200*(1.03**120+1.03**108+1.03**96+1.03**84+1.03**72+1.03**60+1.03**48+1.03**36+1.03**24+1.03**12) = 135,467
See examples for different durations at 3% compound interest
Annual 1200 defaulted for 5 years at 3% compounded monthly gives 19,656 Arrears
Annual 1200 defaulted for 10 years at 3% compounded monthly gives 135,467 Arrears
Annual 1200 defaulted for 15 years at 3% compounded monthly gives 817,774 Arrears
Annual 1200 defaulted for 20 years at 3% compounded monthly gives 4,837,661 Arrears
Annual 1200 defaulted for 30 years at 3% compounded monthly gives 168,055,484 Arrears
Annual 1200 defaulted for 40 years at 3% compounded monthly gives 5,833,507,223 Arrears
Any land rate defaulter should be very worried lest you owe more than 5.8 Billions after defaulting annual 1200 at 3% compounded monthly for 40 years while the total principal land rate owed is 48,000.
The counties are using the “Power of Compound Interest” to commit a ‘robbery using a pen’ or ‘wizi kwa kalamu’.
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Rank: Elder Joined: 12/27/2012 Posts: 2,256 Location: Bandalungwa
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I am a proponent of higher land rates.
Why?
Kenyans should stop this mashamba habit. Buying plots and leaving them unproductive in the hope that they appreciate in value does not benefit the public nor the economy. It is actually detrimental to the economy.
Also low land rates encourages land grabbing. mashamba obsessed politicians have been ammassing huge tracts of land then leaving them unproductive.
Kenya should introduce the concept of property taxes. Huko majuu, property taxes are charged based on the value of the land.
As an example, in New York, property taxes are 1.5% per year. So if your property is worth /= 1 million, then each year you pay /= 15,000 in property taxes.
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Rank: Elder Joined: 12/7/2012 Posts: 11,937
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Why default and cry in the same line. I pay my rates to County and rents to GoK religiously  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 11/17/2009 Posts: 399 Location: Where everyone knows you
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I have NO problem paying land rates. The problem is that in many counties you get NO notification of these. No demands by any method - mail , email etc.
You have to physically go to the land office to find out. Stand in big ques to find out what you owe.
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Rank: Elder Joined: 12/7/2012 Posts: 11,937
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MatataMingi wrote:I have NO problem paying land rates. The problem is that in many counties you get NO notification of these. No demands by any method - mail , email etc.
You have to physically go to the land office to find out. Stand in big ques to find out what you owe. Do you normally get notification to pay paye. Lipa ushuru  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Veteran Joined: 11/9/2009 Posts: 2,003
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I am waiting for the waivers... ...I am certain, for political gain, this will happen in the upcoming campaigns
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Rank: Elder Joined: 7/10/2008 Posts: 9,131 Location: Kanjo
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creativekaggs wrote:The annual land rates are typically very small amounts. Most counties charge Kshs 1200 while few charge Kshs 5000.
The penalties for rate defaulters is currently 3% of the unpaid arrears, compounded monthly. This compound interest raises the owed amount astronomically and very fast making it impossible for some land owners to ever settle their debt or be current.
See some worked examples.
Kamau has defaulted 1200 annual land rate at 3% monthly compound interest for 44 months. What amount does he owe? Principal land rate = 1200*4 = 4800
Amount = 1200*(1.03**44+1.03**32+1.03**20+1.03**8) = 11,183
Ouma has defaulted 1200 annual land rate at 3% monthly compound interest for 10 years. What amount does he owe? Principal land rate = 1200*10 = 12,000
Amount = 1200*(1.03**120+1.03**108+1.03**96+1.03**84+1.03**72+1.03**60+1.03**48+1.03**36+1.03**24+1.03**12) = 135,467
See examples for different durations at 3% compound interest
Annual 1200 defaulted for 5 years at 3% compounded monthly gives 19,656 Arrears
Annual 1200 defaulted for 10 years at 3% compounded monthly gives 135,467 Arrears
Annual 1200 defaulted for 15 years at 3% compounded monthly gives 817,774 Arrears
Annual 1200 defaulted for 20 years at 3% compounded monthly gives 4,837,661 Arrears
Annual 1200 defaulted for 30 years at 3% compounded monthly gives 168,055,484 Arrears
Annual 1200 defaulted for 40 years at 3% compounded monthly gives 5,833,507,223 Arrears
Any land rate defaulter should be very worried lest you owe more than 5.8 Billions after defaulting annual 1200 at 3% compounded monthly for 40 years while the total principal land rate owed is 48,000.
The counties are using the “Power of Compound Interest” to commit a ‘robbery using a pen’ or ‘wizi kwa kalamu’.
Kaggz, stop ethnic profiling!! i.am.back!!!!
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Rank: Veteran Joined: 4/1/2009 Posts: 1,885
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creativekaggs wrote:The annual land rates are typically very small amounts. Most counties charge Kshs 1200 while few charge Kshs 5000.
The penalties for rate defaulters is currently 3% of the unpaid arrears, compounded monthly. This compound interest raises the owed amount astronomically and very fast making it impossible for some land owners to ever settle their debt or be current.
See some worked examples.
Kamau has defaulted 1200 annual land rate at 3% monthly compound interest for 44 months. What amount does he owe? Principal land rate = 1200*4 = 4800
Amount = 1200*(1.03**44+1.03**32+1.03**20+1.03**8) = 11,183
Ouma has defaulted 1200 annual land rate at 3% monthly compound interest for 10 years. What amount does he owe? Principal land rate = 1200*10 = 12,000
Amount = 1200*(1.03**120+1.03**108+1.03**96+1.03**84+1.03**72+1.03**60+1.03**48+1.03**36+1.03**24+1.03**12) = 135,467
See examples for different durations at 3% compound interest
Annual 1200 defaulted for 5 years at 3% compounded monthly gives 19,656 Arrears
Annual 1200 defaulted for 10 years at 3% compounded monthly gives 135,467 Arrears
Annual 1200 defaulted for 15 years at 3% compounded monthly gives 817,774 Arrears
Annual 1200 defaulted for 20 years at 3% compounded monthly gives 4,837,661 Arrears
Annual 1200 defaulted for 30 years at 3% compounded monthly gives 168,055,484 Arrears
Annual 1200 defaulted for 40 years at 3% compounded monthly gives 5,833,507,223 Arrears
Any land rate defaulter should be very worried lest you owe more than 5.8 Billions after defaulting annual 1200 at 3% compounded monthly for 40 years while the total principal land rate owed is 48,000.
The counties are using the “Power of Compound Interest” to commit a ‘robbery using a pen’ or ‘wizi kwa kalamu’.
the penalty for default is clear. if you find it punitive then simply avoid defaulting. if you can't pay simple rates and rent then you have no business owning property.
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Rank: Chief Joined: 5/9/2007 Posts: 13,095
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Just save enough for the principal then wait for the 100% waiver by the governors. Its all over TV these days.
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Rank: Veteran Joined: 10/8/2008 Posts: 1,575
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harrydre wrote:creativekaggs wrote:The annual land rates are typically very small amounts. Most counties charge Kshs 1200 while few charge Kshs 5000.
The penalties for rate defaulters is currently 3% of the unpaid arrears, compounded monthly. This compound interest raises the owed amount astronomically and very fast making it impossible for some land owners to ever settle their debt or be current.
See some worked examples.
George has defaulted 1200 annual land rate at 3% monthly compound interest for 44 months. What amount does he owe? Principal land rate = 1200*4 = 4800
Amount = 1200*(1.03**44+1.03**32+1.03**20+1.03**8) = 11,183
Mary has defaulted 1200 annual land rate at 3% monthly compound interest for 10 years. What amount does he owe? Principal land rate = 1200*10 = 12,000
Amount = 1200*(1.03**120+1.03**108+1.03**96+1.03**84+1.03**72+1.03**60+1.03**48+1.03**36+1.03**24+1.03**12) = 135,467
See examples for different durations at 3% compound interest
Annual 1200 defaulted for 5 years at 3% compounded monthly gives 19,656 Arrears
Annual 1200 defaulted for 10 years at 3% compounded monthly gives 135,467 Arrears
Annual 1200 defaulted for 15 years at 3% compounded monthly gives 817,774 Arrears
Annual 1200 defaulted for 20 years at 3% compounded monthly gives 4,837,661 Arrears
Annual 1200 defaulted for 30 years at 3% compounded monthly gives 168,055,484 Arrears
Annual 1200 defaulted for 40 years at 3% compounded monthly gives 5,833,507,223 Arrears
Any land rate defaulter should be very worried lest you owe more than 5.8 Billions after defaulting annual 1200 at 3% compounded monthly for 40 years while the total principal land rate owed is 48,000.
The counties are using the “Power of Compound Interest” to commit a ‘robbery using a pen’ or ‘wizi kwa kalamu’.
Kaggz, stop ethnic profiling!! I care!
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