@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

Interesting question. Development of the land would actually start with subdivision. If you check page of the mutation (for cap 300 land) it talks of development plan. However, I also think doing minimal stuff like planting trees is deveoping the land. I noted brookside have planted blue gums in their land as part of their 'development' of their expansive land along the eastern by-pass.

In other words, you may not necessarily even need to put up a structure to be deemed to develop the land....

On a more serious note..agricultural land needs to utilized for the same not to be deemed idle.
The land which is residential, then probably the expectation is the same that it is utilized for those purposes to be deemed developed. Whatever u develop may not be an issue unless of course the land is leased and in that case a lease is always accompanied with a set of special conditions that define how the development in it ought to be done...in liaison with the respective council...

I guess major companies like Knight Frank and the rest which manage tenants will be easily managed by the tax man.if you count the number of tenants in CBD and other major cities/ town, then it will be a significant contribution to the taxman....
for tenants in West or eastlands, am sure they will build residential houses in the plots they hold in kitengela, kamulu,ruiru, etc since with bypasses it takes more less the same time to reach town from umoja or ruiru. I think more guys will buy property to build than to speculate.... for business in CBD,then no choice but to comply, and as usual...pass the cost to the consumer..

tano ya kapii