Private sector representatives are urgently appealing to the government to foster a more favorable commercial climate and adopt a less aggressive tax policy to stimulate domestic investment and economic recovery.
The stakeholders argued that the multitude of taxes introduced by the State—including levies on construction materials and deductions from salaries—have drastically eroded Kenyans’ purchasing power and dealt a major setback to investment initiatives. Real estate sector players believe this is a primary reason why many Kenyans are struggling to secure the funds needed to buy land or homes, thereby exacerbating the nation’s housing shortage.
Amos Karuri, the firm’s Managing Director, concurred, stating that the rising tax burden has actively discouraged investment, particularly in the Real Estate sector. He specifically pointed to the decision to raise stamp duty from two percent to four percent in peri-urban municipalities. This hike, Karuri explained, has caused land and house prices near urban centers to soar, placing homeownership out of reach for many citizens.
Speaking at the Dependable Brands awards ceremony held at Weston Hotel in Nairobi, Peter Gichuki, CEO of Top Care Properties Limited, emphasized that a relaxed tax framework and a supportive business environment are essential for ordinary Kenyans to increase their investments and achieve property ownership. Gichuki noted that the current difficult economic circumstances have severely curtailed investment, causing adverse ripple effects across the national economy.
John Thiong’o, CEO of Next Level Properties, underscored the significance of the real estate sector as a core driver of the country’s development. He urged the government to implement policies and laws designed to create a vibrant growth environment for the sector, noting its substantial contribution to the national economic output and its role in generating countless jobs, especially for young people.
“We have seen a notable reduction in investments, especially in land properties, this year, driven by the tough economic climate and elevated taxation. We remain hopeful, however, that the Government will make the necessary interventions to resolve this situation,” Gichuki stated.
Karuri further appealed to the government, saying, “The government should consider the prevailing economic situation in the country before imposing additional taxes that could frighten away investors, who are crucial in turning around the nation’s economy.”
In a similar vein, Catherine Kathure, CEO of Homelink Mabati, called for a reduction in excise duty for importers, especially those actively participating in the ongoing affordable housing program. “As players in the construction industry, we are prepared to collaborate with the Government and contribute significantly to the successful execution of the affordable housing program so that all Kenyans can gain access to suitable and affordable accommodation,” Kathure affirmed.
Despite the tax concerns, MD Karuri praised the recent strides made in the sector through government-led digitization efforts. He highlighted that the ongoing digital overhaul of land registration and documentation processes has streamlined investments for first-time buyers, making the process safer and minimizing the potential for fraud.
“We commend the government for digitizing essential parts of the land sector. It has helped rebuild confidence and opened up the market to more prospective investors. Our ongoing plea, however, is for the government to complete the process by digitizing land control boards and related institutions. This will ensure both buyers and sellers benefit from an efficient, transparent system,” the MD added.
In a separate cautionary note, Karuri advised Kenyans intending to purchase land or homes to carry out thorough due diligence before committing their finances, to protect themselves from unscrupulous individuals or companies selling bogus properties.
He expressed alarm that numerous Kenyans have collectively lost billions of shillings to fraudulent land deals and cautioned land-buying and selling companies to uphold high integrity and ensure the properties they resell are free of legal disputes.
