The Kenya Property Investors Association ( KEPIA) is warning of potential rent hikes of 25% as a result of increased taxes.
Ephraim Murigu, the Secretary General of the association, mentioned to the media on Monday that landlords and property owners have expressed concerns about the Finance Bill 2024.
An increase in rent will not only have an impact on residential tenants, but also on commercial tenants leasing retail space and other business premises.
“I have heard from my members, including landlords and other corporate tenants, who are complaining about the current bill. They will increase the rent by 15%- 25% because they have no other option,” Ephraim Murigu stated.
In addition to KEPIA members, the Secretary General indicated that other landlords and property owners have announced their intention to raise rents.
This decision is motivated by the need to remain financially viable in the current challenging economic climate, which they anticipate will worsen if the new bill passes.
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Rising costs may force Kenyans to seek cheaper housing, leaving some properties vacant. This vacancy crisis, together with potential relocations, could hurt the economy and property owners.
“Currently, landlords are suffering, about 60% are not getting their rent. If you ask a landlord today they’ll tell you that most of the spaces are empty, houses and shops for rent. This is because some cannot afford the rent anymore,” Ephraim added.
A Kenya National Bureau of Statistics ( KNBS), report reveals a continuous upward trend in construction prices since the beginning of the year.
Kenyans who are already struggling to afford building materials also have to deal with more expensive construction costs.
The proposed tax hikes in the Finance Bill 2024 threaten to worsen Kenya’s cost of living for many citizens.
“Today, you can’t even buy a can of paint, it’s up from Ksh 2,400 to Ksh 3,200. What do they expect us to do?” Ephraim Murigu stated.
The National Assembly Finance Committee on Tuesday, is expected to reveal its report on the bill after weeks of public participation.
Unveiled in May, The Finance Bill 2024 has sparked widespread disapproval from Kenyans and leaders across the political spectrum.
They’re urging the government to scrap the proposed taxes, arguing they’ll only add to the existing burdens faced by Kenyans.