Government targets Airbnbs in fresh tax drive
The Tourism Fund and other regulatory agencies have embarked on the registration of more Airbnbs hosted in the country to boost revenue in the hospitality industry.
An Airbnb which is an acronym for air bread and Breakfast, a is a service that lets property owners rent out their spaces to travelers looking for a place to stay.
According to the Fund, despite about 40,000 Airbnb hosts being listed in Kenya, the agency has registered only 400 across the country.
Most of these Airbnbs are not registered by regulatory agencies like the Tourism Regulatory Authority and other licensing bodies such as counties making it hard to track and register them.
This also means the government is losing revenue as more Kenyans opt for luxurious Airbnb’s rather than traditional hotels for accommodation.
The Fund’s Chief executive David Mwangi stated that they have also initiated a discussion with Airbnb Africa office to have all hosts on the platform sensitized and registered.
“We urge all hosts to know that they offer accommodation and as a result are required by law to register and remit the 2 percent levy,” said Mr Mwangi, during a stakeholder meeting that brought together county officials from counties under the North Rift Economic Bloc (Noreb).
Mr Mwangi explained that recently, the state agency held a training workshop for 120 hosts in Nakuru County to ensure all owners understood their obligation to compliance.
“The product is no longer as it is due to the rise in online business. We have new entrants and we are working to overcome this challenge but we have had many of them voluntarily registering . . . for new ones, we are engaging counties on how best to have them registered,” said the State agency board chair Mr Samson Some, who was flanked by other board members.
Mr Some noted that they are working to map out and profile tourist sites to increase the number of tourists in the North Rift and other regions in the country.
He explained that through engagements with all stakeholders, they are sensitizing them on the levies to enhance revenue collection and assist in product development.
Airbnbs are becoming increasingly popular in the counties as real estate developers and homeowners are putting up several gate-away homes in the North Rift region to tap into the growing demand for classy and exclusive homes. Some owners are charging as low as Sh2500 and as high as Sh15,000 per night.
In Eldoret town, a one-bedroomed house ranges between Sh2500 and Sh4000 per night, two bedrooms is Sh4500 while a bedroomed house goes for Sh6500 and a four-bedroom house is Sh8000. For a month, one-bedroom houses fetch a minimum of Sh50,000, two-bedroomed houses go for between Sh70,000 and Sh80,000 while a bed-room is Sh100,000, and the four-bedroom is at Sh150,000.
In Kenya, Airbnbs have particularly become popular over the past decade – making it a regional hub. Until 2015, there were only 1,400 Airbnbs in Kenya, about 700 of them in Nairobi.
Today, there are more than 6.6 million listings worldwide and more than four million hosts globally, according to the company’s Q4 2022 letter to shareholders. In Kenya, there are over 10,000 listings on the platform.
The growth of Airbnbs has come amid declining rental prices in uptown estates in Nairobi – prompting some landlords to use the vacant units as short-term rentals. According to the HassConsult Property Index for Quarter 1, 2023, the average rent for residential space decreased by 1.2 percent in March 2023, the sharpest decline since 2018, when the prices fell by 2.5 percent.