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Landlords of Wazua and compliance with KRA
Rank: Elder Joined: 4/22/2009 Posts: 2,863
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MaichBlack wrote:maka wrote:jerry wrote:KulaRaha wrote:Will MPigs pass this one given most of them kula rent? Not all have rentals and they are beneficiaries of same taxes. IMO they'll pass. I concur this will go through... MPigs are mercenaries for hire!!! A bill increasing some allowances somewhere or giving some funny grant to go along with this bill is enough!!! Anyone who passes a VAT bill on medicine and medical equipment in a country where people die of preventable and curable diseases every day could even sell their mother at the right price!!! Bill passing at the right price. Bei ya jioni. ...and those who propose the bill( before it goes to parliament) can sell themselves. IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Member Joined: 6/26/2008 Posts: 384
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MaichBlack wrote:This is PURE HIGHWAY ROBBERY!!! Most rentals (especially residential) don't even have an ROI of 12% and now KRA wants 12% of gross??? Pure Theft!!!
Most landlords don't even make anything for years and some have to even add more more from their pocket to service the loan and the government expects them to part with 12% of gross??? Technically some landlords will be forced to pay the taxes out of their pocket - if their houses are in areas they cannot increase rents [due to over supply (high end apartments), overstretched tenants (low end rentals), haki yetu crowd (low end) etc.]
For the rest (Most Wazuans who don't own homes are here) one thing will happen. The rent will be increased. By 20% plus. Mark my words!!! You can also ask wazua landlords - akina Thimioni! You can see how quiet they are.
This is not a burden to (most) landlords. It is a burden to you! The same fellow who parts with 50% of his income in direct and indirect taxes is about to part with some more. The landlord will pass the tax to you (unless you are in the categories mentioned earlier). The same way the Fuel companies, EABL, safaricom etc. pass the tax to you, hata hii is on you.
Some keep celebrating. Ati let the landlords pay taxes like the rest of us. Landlord gani??? Wewe ndio utailipa pap!!! Hate admitting it but this is exactly what will happen. Rent increase but NOT FOR CURRENT TENANTS, only those who will come after existing tenants vacate/those under a new lease. The longest tenant lasted 11/2 years. On average, there are three new tenants each quarter because of: 1. uni students who move out after finishing coursework or are there in April/August and December school-based classes. 2. Families that get more members and decide to move to bigger houses/families that move into their own homes.
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Rank: Elder Joined: 5/1/2010 Posts: 3,024 Location: Hapa
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Wapi @kysse's landlord @Kaigangio? Float like a butterfly, sting like a bee. - Muhammad Ali🐝
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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butterflyke wrote:Wapi @kysse's landlord @Kaigangio?
They are in a Landlord's conference!! Wacha warudi! @Kysse and crew will be in problems!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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MaichBlack wrote:This is PURE HIGHWAY ROBBERY!!! Most rentals (especially residential) don't even have an ROI of 12% and now KRA wants 12% of gross??? Pure Theft!!!
Most landlords don't even make anything for years and some have to even add more more from their pocket to service the loan and the government expects them to part with 12% of gross??? Technically some landlords will be forced to pay the taxes out of their pocket - if their houses are in areas they cannot increase rents [due to over supply (high end apartments), overstretched tenants (low end rentals), haki yetu crowd (low end) etc.]
For the rest (Most Wazuans who don't own homes are here) one thing will happen. The rent will be increased. By 20% plus. Mark my words!!! You can also ask wazua landlords - akina Thimioni! You can see how quiet they are.
This is not a burden to (most) landlords. It is a burden to you! The same fellow who parts with 50% of his income in direct and indirect taxes is about to part with some more. The landlord will pass the tax to you (unless you are in the categories mentioned earlier). The same way the Fuel companies, EABL, safaricom etc. pass the tax to you, hata hii is on you.
Some keep celebrating. Ati let the landlords pay taxes like the rest of us. Landlord gani??? Wewe ndio utailipa pap!!! I had not really worked this out but now i see that this 12% is not good at all. for someone who takes a mortgage of Kshs 15M for say 10 years, with a rent of say Kshs 180pm he will lose the tax benefit of mortgage interest of about Kshs 97k per month The resultant effect is that paying rent based on gross will lead to more tax per year of Kshs 145,000
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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MaichBlack wrote:This is PURE HIGHWAY ROBBERY!!! Most rentals (especially residential) don't even have an ROI of 12% and now KRA wants 12% of gross??? Pure Theft!!!
Most landlords don't even make anything for years and some have to even add more more from their pocket to service the loan and the government expects them to part with 12% of gross??? Technically some landlords will be forced to pay the taxes out of their pocket - if their houses are in areas they cannot increase rents [due to over supply (high end apartments), overstretched tenants (low end rentals), haki yetu crowd (low end) etc.]
For the rest (Most Wazuans who don't own homes are here) one thing will happen. The rent will be increased. By 20% plus. Mark my words!!! You can also ask wazua landlords - akina Thimioni! You can see how quiet they are.
This is not a burden to (most) landlords. It is a burden to you! The same fellow who parts with 50% of his income in direct and indirect taxes is about to part with some more. The landlord will pass the tax to you (unless you are in the categories mentioned earlier). The same way the Fuel companies, EABL, safaricom etc. pass the tax to you, hata hii is on you.
Some keep celebrating. Ati let the landlords pay taxes like the rest of us. Landlord gani??? Wewe ndio utailipa pap!!! I had not really worked this out but now i see that this 12% is not good at all. for someone who takes a mortgage of Kshs 15M for say 10 years, with a rent of say Kshs 180K pm he will lose the tax benefit of mortgage interest of about Kshs 97k per month The resultant effect is that paying rent based on gross will lead to more tax per year of Kshs 145,000
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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heri wrote:MaichBlack wrote:This is PURE HIGHWAY ROBBERY!!! Most rentals (especially residential) don't even have an ROI of 12% and now KRA wants 12% of gross??? Pure Theft!!!
Most landlords don't even make anything for years and some have to even add more more from their pocket to service the loan and the government expects them to part with 12% of gross??? Technically some landlords will be forced to pay the taxes out of their pocket - if their houses are in areas they cannot increase rents [due to over supply (high end apartments), overstretched tenants (low end rentals), haki yetu crowd (low end) etc.]
For the rest (Most Wazuans who don't own homes are here) one thing will happen. The rent will be increased. By 20% plus. Mark my words!!! You can also ask wazua landlords - akina Thimioni! You can see how quiet they are.
This is not a burden to (most) landlords. It is a burden to you! The same fellow who parts with 50% of his income in direct and indirect taxes is about to part with some more. The landlord will pass the tax to you (unless you are in the categories mentioned earlier). The same way the Fuel companies, EABL, safaricom etc. pass the tax to you, hata hii is on you.
Some keep celebrating. Ati let the landlords pay taxes like the rest of us. Landlord gani??? Wewe ndio utailipa pap!!! I had not really worked this out but now i see that this 12% is not good at all. for someone who takes a mortgage of Kshs 15M for say 10 years, with a rent of say Kshs 180K pm he will lose the tax benefit of mortgage interest of about Kshs 97k per month The resultant effect is that paying rent based on gross will lead to more tax per year of Kshs 145,000 Kindly separate capital payments and the cost of capital. KRA has nothing to do with capital costs and frankly don't care where you get it from. They however appreciate that it costs something to get that capital, hence they recognize interest payments as an expense. 12% is good in so far as it has come down from 30%, but I doubt if it will bring a significant number of landlords into the tax net. I would have preferred where they treated rental income like Turnover Tax, charging 3% of gross income and not allowing for any deductions.
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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Gordon Gekko wrote:heri wrote:MaichBlack wrote:This is PURE HIGHWAY ROBBERY!!! Most rentals (especially residential) don't even have an ROI of 12% and now KRA wants 12% of gross??? Pure Theft!!!
Most landlords don't even make anything for years and some have to even add more more from their pocket to service the loan and the government expects them to part with 12% of gross??? Technically some landlords will be forced to pay the taxes out of their pocket - if their houses are in areas they cannot increase rents [due to over supply (high end apartments), overstretched tenants (low end rentals), haki yetu crowd (low end) etc.]
For the rest (Most Wazuans who don't own homes are here) one thing will happen. The rent will be increased. By 20% plus. Mark my words!!! You can also ask wazua landlords - akina Thimioni! You can see how quiet they are.
This is not a burden to (most) landlords. It is a burden to you! The same fellow who parts with 50% of his income in direct and indirect taxes is about to part with some more. The landlord will pass the tax to you (unless you are in the categories mentioned earlier). The same way the Fuel companies, EABL, safaricom etc. pass the tax to you, hata hii is on you.
Some keep celebrating. Ati let the landlords pay taxes like the rest of us. Landlord gani??? Wewe ndio utailipa pap!!! I had not really worked this out but now i see that this 12% is not good at all. for someone who takes a mortgage of Kshs 15M for say 10 years, with a rent of say Kshs 180K pm he will lose the tax benefit of mortgage interest of about Kshs 97k per month The resultant effect is that paying rent based on gross will lead to more tax per year of Kshs 145,000 Kindly separate capital payments and the cost of capital. KRA has nothing to do with capital costs and frankly don't care where you get it from. They however appreciate that it costs something to get that capital, hence they recognize interest payments as an expense. 12% is good in so far as it has come down from 30%, but I doubt if it will bring a significant number of landlords into the tax net. I would have preferred where they treated rental income like Turnover Tax, charging 3% of gross income and not allowing for any deductions. Your argument is faulty. The 97K i used is interest only why should the guy with higher rent income ( above Kshs 10M) be allowed to pay tax on net meaning he can deduct interest expenses while the guy with less than Kshs 10M rent is not able to deduct the interest expenses The effect is that the guy paying tax on gross rent ends up paying more in tax it is wrong to say the rate has come down from 30% to 12%. Having worked it out with figures, it is actually the case that with 12%, the tax is higher But i have assumed the case of someone who has financed the rental units with mortgage and hence interest is tax deductible
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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gmg wrote:In other words one month gross rent belongs to KRA. Not one month! One and a half months!!! 12/100 * 12 months = 1.44 months!!! And in real sense it is more like two months rent per year!!! Why? Because they are taxing GROSS!!! This means for that one and a half months, you pay for them the lighting bill for common areas, the watchmen, the care taker, maintenance etc. from your share (the remaining 10 months in the year!). Hii ni hujuma of the highest order. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 10/29/2007 Posts: 76
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I think 12% is good for those who have few overheads/ mortgage/ financing. And even if it is high, I think we should always look at how our money is used not how much they collect from us. A case is Denmark and some other countries where the tax rate on income is 50%. The citizens there pay up promptly because the services they receive are excellent! Here we pay 30% and spend lots more for almost everything that a Gova should provide e.g Security.
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Rank: Member Joined: 10/29/2007 Posts: 76
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By the way, I think the real estate sector will slow down sooner or later.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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mwania wrote:I think 12% is good for those who have few overheads/ mortgage/ financing. And even if it is high, I think we should always look at how our money is used not how much they collect from us. A case is Denmark and some other countries where the tax rate on income is 50%. The citizens there pay up promptly because the services they receive are excellent! Here we pay 30% and spend lots more for almost everything that a Gova should provide e.g Security.
You are putting the cart before the horse!!! They should PROPERLY spend the taxes we pay first before asking for more!!! This applies at all levels - including at home. If a parent gives his/her kid money to set up a business, before the kid comes back for more to "boost" the business, he/she must show the progress they have made so far with the initial resources! This one is a kid who takes money, goes drinking and then comes for more!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 10/29/2007 Posts: 76
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Maich. You are right. However, we all know how poorly our taxes are utilized. We need to put pressure for full accountability. When the taxman is coming for the money due to them, we have to pay and its normally under duress. When the auditor of public institutions finds very serious fraud, the suspects are handled with kid gloves.. e.g. the City Hall guy suspected to have stolen Kshs. 400M in one year is free on a meagre kshs. 2m bail. And I am not sure if they will attach all his assets to recover the money even if the guy is found guilty.
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Rank: Elder Joined: 5/1/2010 Posts: 3,024 Location: Hapa
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MaichBlack wrote:butterflyke wrote:Wapi @kysse's landlord @Kaigangio?
They are in a Landlord's conference!! Wacha warudi! @Kysse and crew will be in problems!!! @Kaigangio umetoka conference? Float like a butterfly, sting like a bee. - Muhammad Ali🐝
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Rank: Elder Joined: 1/17/2013 Posts: 4,693 Location: Earth
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MaichBlack wrote:butterflyke wrote:Wapi @kysse's landlord @Kaigangio?
They are in a Landlord's conference!! Wacha warudi! @Kysse and crew will be in problems!!! Jeso! I rent 2 kagizzards houses in 2 separate locations because of convenience. hujumaa! Kaigangio,take note;I will soon overthrow you.
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Rank: Elder Joined: 1/17/2013 Posts: 4,693 Location: Earth
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MaichBlack wrote:butterflyke wrote:Wapi @kysse's landlord @Kaigangio?
They are in a Landlord's conference!! Wacha warudi! @Kysse and crew will be in problems!!! Jeso! I rent 2 of kagizzards houses in 2 separate locations because of convenience. hujumaa! Kaigangio we need to talk!
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Rank: New-farer Joined: 1/30/2015 Posts: 23
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