Increased taxes are negatively impacting Kenya’s land and real estate business leading to a decline in property transactions and investment, industry players say. According to developers, high taxes have significantly reduced disposable income, thereby decreasing the ability of Kenyans to spend.

They equally lamented that increased property taxes which include income, capital gains and property taxes have been influencing real estate investment by affecting the cost of property acquisition, cost of holding, and cost of selling properties.

Money for investment

Led by Tabitha Kanyigi, the CEO of Dafari Property Developers Ltd, the developers called on the government to consider reducing taxes to enable Kenyans have extra money for investment.

Kanyigi noted with concern that with reduced disposable income, people have less money to spend on goods and services, leading to a reduction in overall demand and potentially impacting their businesses.

She noted that the vital sector which has been contributing significantly to the economy, driving gross domestic product (GDP) growth, creating jobs, and stimulating other sectors, should be handled with extreme care as it holds key solutions to turning around Kenya’s economy.

“There is no cash flow and the little that many have, most Kenyans have been shying away from investing over fears of the unknown. The taxes, coupled with political instability in the country, are to blame for the declining transactions in the sector,” stated Kanyigi.

She at the same time called on the government to build better roads in the rural areas to enhance property value, attract buyers, facilitate construction and logistics, and improve overall accessibility.

In the wake of increased land-related scams, a growing concern that have seen thousands of Kenyans lose millions to cartels, Kanyigi challenged investors to conduct due diligence before making any transactions to avoid losing their hard-earned money to fraudsters.

“Kenyans really struggle to make money and losing even a coin of it is very painful. To avoid the scams we have recently experienced, there should be no rush in land purchase transactions. Take your time to do due diligence and don’t pay a coin until you are sure that the deal you are entering is real,” stated the CEO.