Institution of Surveyors of Kenya (ISK) — the body that brings together estate managers, valuers and surveyors, said a number of landlords in the middle and low-income neighbourhoods have already issued notices to tenants with the intent to increase rent at the end of the month.
“Some landlords have issued notices to tenants increasing rent citing income tax. This has created panic in some areas,” said Collins K’Owuor, the chair of ISK.
“This is wrong as income tax is not a new cost but one that has always been there only not fully adhered to.”
Areas worst affected include the low-middle income estates in Eastlands in Nairobi and other areas across the country.
A sample by Business Weekly indicated that the increment ranges between Sh1,000 to Sh2,000.
Property analysts say the development is bound to result in social upheavals and a rise in rent and mortgage loan defaults as tenants adjust to any increments.
“Income tax is something that any qualified estate manager will know does not result in an increase in rent and advise the property owners on the same,” said Stephen Omeng.
Lobby group Consumer Federation of Kenya expressed concern over the news saying that while tax has to be complied with, there is need for consensus building between Treasury, tenant associations and other interest groups in effecting the proposal without hurting the ordinary Kenyan.
“It is a no brainer that unscrupulous landlords will take advantage of this to evict tenants so as to charge the incoming ones higher rents,” said Stephen Mutoro, chair of Cofek.
“The problem here is the money may not reach KRA being a net income calculation. Lets find a way to include tenants in smoking out landlords.”