By Isaac Salima and Patience Lunda:
Some property owners in Blantyre and Mzuzu cities have raised concern over Blantyre City Council (BCC) and Mzuzu City Council (MCC)’s decision to raise city rates.
BCC has announced an upward adjustment of property values effective April 1, 2025.
A statement signed by the council’s chief executive officer Dennis Chinseu indicates that residential property levies have been revised by 0.00127 (which means 10 percent) of the total value of the property while for commercial property, the rate has been revised to 0.00324 ( about 35 percent).
The development means owners of residential and commercial property would be paying a leg just to continue owning such property.
Representing the business community, Abbas Panjwani said the hike would punish innocent people.
“At a time when businesses are already grappling with rising operational costs, inflationary pressures and economic uncertainty, a hike in property rates will only add to their financial strain. This burden will be particularly severe for small and medium-size enterprises, potentially leading to job losses, reduced investment and, in some cases, business closure— ultimately hindering the city’s economic growth,” he said.
Other property owners described the move as a slap in their face, saying Malawians are already struggling to afford basic necessities in the midst of an errant inflation rate.
“However, property owners have already been complaining about very high city rates; that the last Quinquennial valuation exercise was not done well and that objections to the valuers so inserted were not exhausted. Instead of dealing with the queries, the council proceeds to increase the rates further, thereby contributing to the rise of the cost of living in the city. All this is being done when there are complaints of poor service delivery and the general state of public infrastructure in the city is at its lowest standard.
“There is also the issue that it is the same property owners that bear the blunt of this increase. Why not increase the tax base by including areas that are outside the city boundary (peri-urban) such as Mpemba, Chileka, Ngumbe, Lunzu, etc, into the city so that they become rateable. Such a move [changing the rate in Kwacha] is insensitive and politically naive in that at a time the government is trying hard to lower inflation, an arm of the same government is doing the opposite,” said G.M. Wawanya.
Mike Mangwanya, who owns a commercial building in Blantyre, said the adjustment was poorly timed.
“We are complaining about rising commodity prices and this means that landlords and landladies will have to increase their rentals and Malawians who have no property will be at the receiving end of all this,” he said.
However, Chinseu defended the move, saying they would like to expand their revenue base.
“What we are doing is trying to top up our resources so that we can ably provide our services.
“However, we are aware of the situation on the ground and, so, we have done our best not to penalise the people. You can see that the adjustments are not that high,” he said.
In Mzuzu, the council has adjusted upwards the mill rate on real property tax or city rate starting from April 1, 2025.
The new mill rate on residential property has been revised by 33 percent, with that of commercial and institutional property revised by 19 percent.
MCC publicist Macdonald Gondwe said they last made the adjustment in 2014 and that the hike had been made to improve service provision in the city.
Gondwe added that they adjust the mill rate after 10 years but that it had taken them 11 years to announce the adjustment, which he described as reasonable.
“Usually, the resources that the council gets from the city rates are the same resources we use to provide essential services to the city. So, with that adjustment, we feel like we will provide the much-needed services to the people of Mzuzu because we will be able to collect enough [money],” Gondwe said.
On his part, Association of Real Estate Agents in Malawi Area President, Ken Msonda, said the decision had been made without consulting them or other traders, which is not good considering the tough economic times that the citizenry is facing.
However, Msonda appealed to property owners to ensure that they remit the mill rates as failure to do so cripples operations of councils.
“It is something good but has been done at the wrong time. They should have given the citizenry and us an opportunity to give them our side of the story. We are really concerned that there were no consultations made,” he said.
The current mill rate on residential property is 1.50 and the revised one is 2.00 while the current mill rate on commercial property is 2.10 and the revised one is 2.50.
The current rate on institutional property is 2.10 while the revised one is 2.50.
MCC has also announced that all business premise licences for the 2024-25 financial year will expire on March 31, 2025.
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