The Kenya Property Developers Association (KPDA) CEO breakfast recently brought together stakeholders in the real estate sector to discuss various government policies and legislation affecting the industry. These regulations have a significant impact on the sector, influencing the prices of real estate in Kenya and affecting investment and development decisions.
Some of the policies discussed included the Finance Act of 2022, which increased the rate of capital gains tax from 5 percent to 15 percent, the Sectional Properties Act 2020, which allows for the subdivision of buildings into units to be owned by individual proprietors, and the Affordable Housing Regulations, which made contributions to the National Housing Development Fund voluntary.
While these policies have the potential to benefit the sector, their implementation has been hindered by a lack of clear communication and concise guidelines. This has led to sector players decrying the tough timelines set to meet these terms.
The panel at the KPDA CEO breakfast included various experts from different fields, discussing topics such as the government’s role in real estate, the tax regime for the property sector, the role of regulators in real estate, and opportunities and challenges in housing finance.
Patrick Analo Akivaga, the Chief Officer of Urban Development & Planning Nairobi City County, discussed the county’s efforts to work on a policy that will provide density bonuses/planning gain for developers in green buildings. Mohsin Admjee, the partner at Admjee Auditors CPA, addressed the tax regime for the property sector and the effect of the capital gains tax increment on property sellers. He also talked about efforts to push for the government to include an indexation allowance when calculating C.G.T. to encourage more investors.
NCA Executive Director Eng. Maurice Akech discussed the role of regulators in real estate, including contractors’ registration and the issue of non-compliance, which is one of the reasons why there are so many building collapses. Michael Muthengi, the Country Manager of Business Partners International, discussed opportunities and challenges in housing finance and available alternative financing options in real estate.
Overall, the KPDA CEO breakfast provided an important platform for stakeholders in the real estate sector to engage in discussions on various government policies and regulations affecting the industry. Such engagement is crucial in driving the growth and development of the sector.