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Governors seek tax freeze on rental incomes

REAL ESTATE
By Mwangi Muiruri | May 7th 2020

The Council of Governors (CoG) wants the National Treasury to waive taxes on rental income during the pandemic period.

This, they note, will benefit landlords who have given rental relief to tenants.

CoG also wants financial institutions to be genuine in extending credit concessions to landlords to help them offer rent reprieve to tenants.

CoG Deputy Chairman Mwangi wa Iria (pictured) told Home & Away that the landlords ought to be protected from myriad challenges bedevilling the sector - mostly Covid-19 and flooding.

He said tax reduction or waiver on rental incomes will help landlords extend a waiver of at least 30 per cent on rental rates. Wa Iria stressed that tenants will benefit more if the banks were genuine in offering credit concessions to landlords.

The Murang’a County boss castigated financial institutions’ predatory behaviour, noting that “they announce their willingness to revise credit service terms but demand strict adherence to the preexisting contractual service agreements.”

He urged landlords to relate well with their tenants, particularly low-income earners during the pandemic period, worsened by floods.

“The landlords are walking on an economic minefield. They are faced with tenants whose daily bread occupations have suffered greatly lowering or destroying incomes, rental yields have dipped,” he said.

Direct savings

He observed that the recent taxation relief will not post immediate results since the purchasing power is dependent on other factors.

Wa Iria said landlords require deliberate measures that translate into direct savings to help tenants gain direct reprieve on rental obligations.

He said CoG is keenly following the situation in counties and will implement rules that benefit both landlords and the tenants.

“We have water and land rates as well as business permits as our direct determinants. The CoG is busy offering rebates along with those areas,” he said.

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