An Analysis Of The Proposed Finance Bill, 2023:The Key Changes and Impact on the Real Estate Sector

On 4th May 2023, the National Treasury tabled the Finance Bill, 2023, to the National Assembly for the first reading. The proposed Finance Bill 2023 introduces a series of significant changes and reforms to the financial landscape of the country. The Bill is a crucial component of the annual budgetary process and outlines the Government's plans for revenue generation, taxation, and fiscal policies.

Understanding Early or Premature Termination of Leases in Kenya

Leasing of property, whether for residential or commercial use, is a common practice in Kenya. However, situations may arise where a tenant may need to terminate the lease agreement before the expiry of the agreed duration. This could be due to various reasons, such as financial difficulties, changes in personal circumstances, or the need to relocate. Early or premature termination of a lease is not always a straightforward process and it may have legal and financial implications for both the tenant and landlord. In this context, it is essential to understand the legal framework governing lease termination in Kenya and the implications of early or premature terminations for tenants and landlords.

The Increase of the Capital Gains Tax on Property Sales In Kenya, Effective January 2023

The Finance Act No. 22 of 2022 amended the Income Tax Act by increasing the rate of Capital Gain Tax (CGT) from the rate of 5% to 15%, effective from 1st January 2023. What is Capital Gains Tax (CGT)? CGT is a tax imposed on the gains which accrue on transfer of property situated in Kenya, on or after 1st January 2015 whether or not the property was acquired before 1st January 2015. A transfer of...

Residential Income Tax

The simplified tax regime on residential rental income was introduced in Kenya with effect from 1st January 2016.It applies to residential rental income ranging from KES 288,000 to KES 15,000,000 per annum. Under this regime, tax is calculated as 10% on gross rent received and is a final tax.The landlord is required to file a monthly return and make payment by 20th day of the following month.The penalty...

Tax Implications on Transfer of Land

The purchase of land or property is capital intensive and tax compliance is vital. Tax implications to the buyer The buyer is required to pay stamp duty on the acquisition of land. The stamp duty is calculated at 4% of the value of land while a 2% applies in instances where the land is located in other areas. Stamp duty is based on the value ascertained by a government valuer. This is done in...

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