Property agents operating without permits face imminent arrest and prosecution as the government intensifies efforts to boost tax revenue from the real estate sector.

The Estate Agents Registration Board (EARB) has issued a stern warning to landlords against engaging unregistered agents to avoid service disruptions.

"In order for the EARB to continue protecting the interest of the public and enhance professionalism in the real estate sector, consumers are advised to deal with registered estate agents only," emphasized Hellen Abuya, the board's registrar.

The Treasury's commitment to allocate more funds for enhanced agent registration aims to facilitate the reporting of landlords who fail to remit rental income tax to the Kenya Revenue Authority (KRA).

Under the Estate Agents Act, practitioners must register with the board and obtain an annual practising certificate.

Read More

  1. KRA announces changes to PAYE computation under amended tax laws
  2. Kenya’s debt soars to Sh10.8 trillion as pressure on finances mounts
  3. MPs reject proposal to centralise KRA deputy commissioners’ appointments

The Act stipulates that registration is open to full members of the Institution of Surveyors of Kenya, as well as holders of recognized qualifications in valuation, estate management, building and land management.

Additionally, individuals of good character without the specified qualifications may be registered at the board's discretion.

Those found practising as estate agents without proper registration risk hefty fines of up to Sh20,000 or imprisonment for up to two years, or both, upon conviction.

The Treasury has expressed concern over low compliance among landlords in filing and remitting taxes to the KRA, despite the "simplified" process introduced in January, which reduced the tax rate from 10 per cent to 7.5 per cent of gross earnings.

"To address compliance challenges in rental income taxation, the government will enhance the registration of property agents, mapping of properties, and leveraging on technology," stated the 2024 Budget Policy Statement.

The KRA's block management strategy, supported by geographic information system (GIS) technology, involves assigning tax service officers to specific residences for better mapping of tax-compliant landlords.

This initiative, along with the recruitment of paramilitary revenue officers and the utilization of financial data from third parties, aims to increase compliance across the real estate sector.

With the number of real estate owners steadily rising, reaching 76,025 by June 2021, the government's focus on enhancing agent registration underscores its commitment to ensuring tax fairness and equity in the rental income sector.