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Institute wants KRA to waive rental tax

HOME & AWAY
By Peter Theuri | April 24th 2020

The government should remove the 10 per cent rental income tax due on residential buildings to ease the burden on landlords, Institution of Surveyors of Kenya (ISK) has said.

The institute says that would prompt landlords to pass on the benefits to tenants, most of whom are facing a torrid time due to the coronavirus pandemic.

The government should also reduce value-added tax (VAT) on commercial buildings.

There has been an outcry from the public over payment of rent as the economic slowdown renders a lot of them unable to honour payments.

Some landlords have come out to waive rents, with others renegotiating terms to reduce the amounts due from tenants.

But most are quiet, prompting some calls for tenants to boycott payment, something the ISK advises against.

“We have learnt through the Press that some groups are advising tenants against paying their rents until further notice. We caution that such remarks are uncalled for and are likely to precipitate chaos with dire consequences to the real estate sector,” said ISK in a statement to newsrooms yesterday.

“We therefore ask members of public to ignore such remarks and the government to rein in on such elements to protect security rights as enshrined in the Constitution and law.” 

The battle between landlords and the Kenya Revenue Authority over payment of rental income tax has been raging, with the tax collector hot on the heels of dodgy defaulters.

The institute, whose membership includes registered real estate agents and property managers, further said it supported dialogue between property owners and renters where waivers of rents, or renegotiation of terms, would be discussed.

“It is worth noting that landlords, just like tenants, have been affected by the ongoing crisis. Property investment is a business like any other, with many owners relying on rents to meet their personal obligations,” said the ISK statement.

“The investors include retirees, the elderly and pensioners.”

In addition, it said, the property owners are expected to service their loans and mortgages among other obligations. 

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