Increase Your Rent, KRA tells Landlords in Kenya

• The Kenya Revenue Authority (KRA) is keeping a close eye on rental income.
• KRA wants landlords to make sure their rents reflect current market rates.
• Landlords are in a tough spot since they have expenses like mortgages and maintenance to cover and have to keep their tenants happy.
• Open communication and market awareness are key to navigating this situation for everyone involved

Landlords, listen up! The Kenya Revenue Authority (KRA) is keeping a close eye on rental income. They’ve noticed that some landlords haven’t adjusted their rent in years, which might mean they’re under-reporting their income.

Landlords currently pay a rental income tax of 7.5% on the gross rental income. This is a reduction of the previous 10%.

What does this mean for you? KRA wants landlords to make sure their rents reflect current market rates. This could lead to rent increases, but it’s not a one-size-fits-all situation.

Here’s why:

• High Vacancies: Many areas have a lot of empty apartments. Raising rent in these areas might just push tenants to move elsewhere.
• Struggling Tenants: Inflation and higher taxes are putting a strain on many people’s budgets. A rent hike could make it even harder for them to afford their homes.

Landlords are in a tough spot too. They have expenses like mortgages and maintenance to cover. Keeping good tenants happy can be more important than squeezing out every last shilling in rent.

So, what’s the solution for landlords?

• Open Communication: Talk to your tenants openly about rent. Explain your situation and see if there’s room for compromise.

• Market Research: Look at similar rentals in your area to see what the going rate is. This can help you decide if a rent increase is fair and competitive.
• Long-Term Tenants: Rewarding good tenants who stay for a long time with stable rent prices can be a smart strategy.

The Bottom Line:

The rental market is a balancing act. KRA wants their fair share of taxes, but landlords need to consider their tenants’ affordability and keep their properties occupied. Open communication and market awareness are key to navigating this situation for everyone involved.