KEPIA Warns Tenants of 25% Rent Increase if Finance Bill 2024 is Passed
The Kenya Property Investors Association (KEPIA) has alerted the public about a potential 25% rent increase due to proposed tax hikes in the Finance Bill 2024. This rise will affect residential and commercial tenants alike. KEPIA’s Secretary General, Ephraim Murigu, emphasized that landlords see no other option but to raise rents to manage the escalating costs and reduced rental income.
The KEPIA has sounded the alarm regarding the proposed Finance Bill 2024, warning of its potential to significantly increase rents across Kenya. Ephraim Murigu, Secretary General of KEPIA, addressed the media, highlighting the growing concerns among property owners and tenants over the looming financial strain this bill could impose.
Murigu explained that landlords are contemplating rent hikes of 15%-25% due to the increased taxes proposed in the Finance Bill 2024. This increase is anticipated to impact a wide range of tenants, from those in residential estates to business owners renting commercial spaces.
Landlords are already facing significant challenges, with approximately 60% not receiving their rent, resulting in many vacant properties. The rising costs of construction materials, as reported by the Kenya National Bureau of Statistics (KNBS), are further complicating the situation. For instance, the price of paint has surged from Ksh2,400 to Ksh3,200, putting additional pressure on property owners to cover their expenses.
Murigu also noted that some tenants might be forced to move to more affordable housing or rural areas, leaving properties vacant and negatively affecting the economy and landlords. He underscored that both KEPIA members and other property owners are considering rent increases to survive in this challenging business environment, especially if the Finance Bill passes in its current form.
The Finance Bill 2024 has generated significant opposition from the public and various political leaders, who urge the government to reconsider the proposed tax increases. As the National Assembly Finance Committee prepares to present its report, the concerns about the economic burden on Kenyans continue to mount. KEPIA and other stakeholders are calling for revisions to the bill to prevent further financial strain on the population and the real estate sector.
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KEPIA Warns Tenants of 25% Rent Increase if Finance Bill 2024 is Passed