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The Kenya Property Investors Association (KEPIA) has warned of rent increases in the country if the Finance Bill 2024 is passed without proper amendments.

Speaking to Kameme TV on Monday, June 17, 2024, Ephraim Murigu, KEPIA Secretary-General noted that some of the proposals contained in the Bill would have a ripple effect on the real estate sector.

He pointed out that property owners would be compelled to raise the rental charges by 15-20 per cent.

Murigu told Kameme TV that the increase would be implemented depending on the size of premises.

“I have heard from my member landlords, and from my corporate tenants (people who have rented business premises) that the biggest issue from the current bill will suit rent between 15 to 20 per cent, and they will do that because they have no other alternative,” Murigu said.

“Whether you have a big or small rental apartment, even when your tenants are complaining of the current hardships, you will be coerced to add rent to survive. I have overheard members and some who are not of this society, that rent will go up whether you like it or not.”

Property market

According to Murigu, this will further affect the real estate market as most Kenyans will opt for cheaper houses due to the high cost of living.

The Finance Bill introduces a range of other tax measures. These include a 2.5 per cent tax on the value of motor vehicles, which will increase operational costs for companies that rely on vehicle fleets for transportation of materials and personnel.

The fuel VAT is also expected to drive up development costs for real estate projects, as fuel plays a crucial role in production and transportation.

“Currently, landlords are suffering, about 60 per cent 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,” Murigu further explained.

Earlier, different stakeholders including the Kenya Association of Manufacturers (KAM) had warned of far-reaching implications of the Finance Bill 2024.

Manufacturers warned the Kenya Kwanza regime that the proposed tax measures are punitive and threaten to derail the country’s economic growth.

With all the feedback raised, MPs are expected to convene on Tuesday, June 18, 2024, and start deliberating on the Finance Bill 2024 before eventually voting on it.

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