NAKUJUA:That does not mean others don't have real estate.Plus,if you want to join Forbes list,you start a business.Investing in stocks and bonds will not get you there.Only Buffett is there on stock investing...

BAICHUMA GATE: I have answered that question more than five times on this thread.Why do you keep repeating??Read the thread again....

Fact: Landlords are not going to absorb the tax alone.. If i was getting 100K from my rental property and now KRA is asking for 30K.. that leaves me with 70K... ill atleast try push up my maths to end up with something in my pocket... So part of the burden will and shall be passed to the Tenant.
However.. i cannot add rent by 30% to maintain my current income..(with the quoted 100K income that would mean hiking rent to almost 140K) that would be crazy...

My bet is rents will be going up by around 5-12%

my question
This hullabaloo on taxing Landlords is proven counter productive a year later and halted for rethinking etc etc.... will any landlord reduce the rent then?
Me thinks this are some ideas that must be thought through quite thoroughly before implementation.

Selah. Everyone would wish to stay in his own house but thanks to our govern and the banks this wont happen soon.

A mortgage with a repayment of 34,000.00 will get you 2m mortgage at 17%. You cant get a two bed house with that amount in kenya.

A two bed house goes for >4.5m now. The mortagage at 17% is 78,000.00

How many people can afford this.

If you think of building your own house. You need atleast 3m. To buy the land 500,000.00 and 2.5m to build.

Its a tough call.

ALMA


"Due to lower returns, banks have a problem getting people to subscribe to their shylock intrest rates. They have to reduce their mortgage rates to attract guys."

NOT when the CBR rate is at 20% and when they can invest in Tbills/Bonds.

I dont remember in my adult life when mortgage rates in kenya went below 12%.

It is not that simple. My opinion is that there will be more demand than supply cause most of us cannot afford mortagages. How many people earn more than 50K.

@Bachuma I will leave the issue of central bank rates to the experts in that area.

You have to understand that its true that Kenyans behave very strangely. How many threads do you see here on wazua...I have 300k where can I buy a plot?

It's not to develop but to just hoard until a time they think it will go up.

The laws of demand and supply are simple. With everyone hoarding, there is no supply. So prices keep going up with no economic fundamentals backing them.

So since the gov't doesn't have the balls to deal with the supply, they've decided to go demand side. Get those taxes owed.

So this leads to the questions on this very post. Is it profitable anymore to get into rental property business. If it isn't then they seek other avenues of investing their incomes.

Thus reducing demand for these hyper priced "semi homes" as most are just as someone posted here...mabati houses.

The reason why the gov't rates may not go down is simply because the gov't doesn't collect what is owed. It has to continue borrowing to build you roads, yet you have refused to pay your taxes. So it goes to borrow again to build you another Thika Road.

So gov't rates stay up to pay off these debts.

If the gov't continues getting more of everyone's share with effective tax collection, then there is less need to borrow leading to less need to keep its rates high.

It's simple and basic economics. It is good for the country but bad for the fake rich guys.

I say fake rich guys because you can't talk of capital gains until you actually sell the asset.

Lets be very honest. How many Kenyans do you know who would part with their houses. I will never sell my mugunda is the rallying call in Kenya.

Leading to a lot of paper millionaires.

Can anyone spell BUBBLE?

I agree with you on Govt borrowing and relationship with collection of taxes.

Land as a factor of production directly contributes to tax revenue generation. Idle land should be taxed as part of the govas opportunity cost. Holding land that would otherwise be housing a factory or coffee bushes for both employment and forex, is a serious drawback, then we expect the govt to build hospitals and roads.Hiyo pesa itatoka wapi?

Remember unemployment is when any of the factors of production including capital lies idle.

You'd have to pay corporation tax, then income tax on whatever little remains.

A tax on rental property is fine..however at 30%?? thats way too high.in other words for every 100bob 1 get from my shackle the gava takes 30%??thats pure theft! when will I ever recover the capital I invested ? thats a great way of killing investment in real estate..with all the hulla ballo of vision 2030 yet you slap a tax of 30% on rentals? Nkt