No one stops investing because of taxes.In this case housing development will continue without any hitch.Anyone who stops investing because of taxes is not an investor.And there is no venture which will be exempt from taxation.Show me one.

ALMA:thank you very much.That is what I was trying to tell them.Pay up.We all hate taxes.Even me,I hate taxes but I pay.Pay up guys.Don't be like MPigs.We should know better.We all want Kenya to develop.Or you(evaders) want Kenya to be like Democratic Republic Of Congo????PAY,PAY,PAY....

You are taxed on income not profits. Otherwise everyone will cook up a scheme to get a rental income of 50k go all the way to 5k after deducting the lavington watchies salary.

The impact on real estate is simple..It will bring real estate returns to reasonable and sustainable levels as they are all over the world.

As it is in Kenya, I can simply go steal some money from someone,build a house in mlolongo and declare myself a pauper. Then come to wazua to complain about the roads in Syokimau.

We have to be honest here. The real estate market in Kenya was burning up and was totally unrealistic and open to all the pirate money from the whole world.

Buy a house and eat the money you stole.

Now at least you will have to pay taxes on your stolen money....Not perfect, but better.

As for increasing rents, that's hogwash. If I pay rent of 30k it means I have disposable income of 30k.

Just because my landlord wants to pay his taxes does not mean that I will pay more rent.

Also consider the guys who have 10 houses at 30k. All of a sudden their incomes are at 300k. The clever ones will sell quickly. The fools will continue building rentals as interest rates are as crazy as they are.

As it stands, I would rather buy shares in mortgage banks than buy a rental.

MaichBlack maybe its not obvious to you that I'm not a taxation expert.....I'm just hoping and praying that its on the net income.

Which unfortunately now means that each and every expense you declare on your tax returns will have to be recorded.

So if you say that you paid Kanyotu frowa gadenas 3k. Kanyotu had better get his tax papers in order.

I'm loving this policy very much...It will catch more people in the tax bracket.

So relax Maich its just my wish..I doubt if its the case unless you run your rental business like your kashamba.....oooops most do.

The income tax act which you can download online is very very clear on this even to a layman by the way. Am no accountant but from what i read, rent income is not subject to VAT (16%), revenue tax(5% of gross revenue- it says that). Tax on rent is expected to fall under the same bands of employment tax and therefore anything above 30k will be taxed at about 30% of gross income.
This may definately have an impact on rents since as every supplier does e.g. eabl and BAT when taxes go up, new prices are posted in print media the next day. The rent may not go up by 30% since that would be horrendous but they will definately rise.

i think the KRA guys really have to think this over, because as i see it its going to be hard to determine how many tenants are occupying the house at one go. the cost of ensuring this is adhered to maybe higher than its benefit.

i also think that if all goes bad. people will just "sell" all their houses to companies (plus the liabilities) what will be left of the net given that loans are more expensive than the income?~answers please!!

Ndaragwa:when you say "kenyans in diaspora" pay taxes as in foreign income in their taxes.Yes,In most countries like the US are supposed to do that.Double taxation??No.US exempts taxes paid...if the tax was paid to another jurisdiction.However,a good number of kenyans in the diaspora are also in default.They don't pay any tax on rental income in any jurisdiction....

Ali Baba I agree Kenyans in the diaspora should pay taxes on rental income to some jurisdiction. USA has no income tax treaty with Kenya that would exempt diaspora residents in the US from any taxes they pay in Kenya - so, I think it would be double taxation for those who pay taxes in Kenya on their rental income and pay another tax on the same income in US. Any insights from a tax expert?? How are the tax treaties between Kenya and Great Britain; and Australia where most of the diaspora are residents??

Ndaragwa,visit IRS website and check "foreign income"....its all there;no need for treaties and commerce secretaries to meet with Githae to iron out agreements....