Real estate sector should prepare for a new normal

As the government continues to lower taxes in a bid to cushion the economy from the devastating effects of Covid-19, economists have been debating whether the new tax relief measures will drastically reduce revenue going to the State, leading to a slowdown in government operations.

The evidence on the ground suggests that this is unlikely to happen. Already, clues are starting to emerge regarding which sectors the government will be turning to for additional tax revenue. The real estate sector is a prime candidate. Only last week, tucked away in a hidden corner of one of the local newspapers, a notice from the Kenya Revenue Authority in conjunction with the Ministry of Lands and Physical Planning notified all leasehold owners about the obligation to pay land rent annually as required under Section 28 of the Lands Act. This could just be the beginning of the new revenue strategy that the government will be deploying in post-Covid Kenya.