Tax rates and thresholds in Kenya change through Finance Act amendments, sometimes annually. This article explains how the system is structured so you know what to ask about — always confirm current rates on KRA's iTax portal or with a licensed accountant before filing.
If you earn rental income in Kenya, it's taxable — there's no threshold below which rental income is simply exempt. What changes based on how much you earn is which regime you fall under, how it's calculated, and whether you can deduct expenses. Here's the structure.
Most individual landlords with residential rental income fall under Kenya's Monthly Rental Income (MRI) regime rather than the normal graduated income tax bands. The mechanics that have generally held since the last major revision:
| Who it applies to | Landlords whose gross annual residential rental income falls within a band set by KRA — historically roughly KES 288,000 to KES 15 million a year. Below or above that band, different rules apply. |
| How it's calculated | As a flat percentage of gross rent received — not profit. You generally can't deduct mortgage interest, repairs, or agent fees under MRI. |
| Final tax | MRI is typically a final tax on that income, meaning it isn't combined with your other income and taxed again at your personal rate. |
| Filing frequency | Monthly, by the 20th of the following month, through iTax — even in a month with no rent collected, if a return is expected. |
Because the exact rate and band thresholds move with Finance Act changes, treat any specific percentage you see quoted online — including in older articles — as something to verify on iTax before you file, not as a fixed number.
MRI is specifically a residential rental income regime. Commercial property — shops, offices, warehouses — is generally taxed under normal income tax rules instead, which means:
If you manage a mixed portfolio — residential units and a commercial unit or two — the two income streams are generally tracked and taxed separately, which is one more reason accurate, unit-level records matter more than a single combined total.
In broad strokes, filing under MRI involves:
This is where accurate rent records earn their keep. If your rent collection is already reconciled — who paid, how much, and when — pulling the monthly gross figure for a return is a lookup, not a reconstruction project. See our guide on collecting rent via M-Pesa for how automated reconciliation feeds directly into this.
| Not filing in low-rent months | A slow month or a vacant unit doesn't automatically remove the filing obligation — check whether a nil return is still expected |
| Mixing residential and commercial income | Reporting them as one figure can misstate what's owed under each regime |
| Reconstructing rent totals from memory or SMS | Without a running reconciled ledger, filing becomes a monthly audit of your own records instead of a five-minute task |
| Assuming last year's rate still applies | Rates and thresholds have changed before and can change again — check iTax each filing cycle if you're unsure |
Generally yes — rental income is taxable regardless of how many units you own. What differs is which regime and filing cadence apply, which depends on your total annual rental income. Confirm your specific obligation on iTax or with an accountant.
Under the Monthly Rental Income regime, typically no — it's calculated on gross rent, not net profit. Outside that band, or for commercial property, normal deduction rules for allowable expenses generally apply. This is a good one to confirm with an accountant given how much it can affect what you owe.
Late filing and late payment penalties apply under KRA rules, and can compound the longer a return goes unfiled. If you've missed returns, an accountant can help you work out the cleanest way to get current rather than guessing.
Property management software doesn't file returns for you, but it removes the hardest part of preparing one — knowing exactly how much gross rent was collected in a given month, reconciled and by unit, instead of piecing it together from bank and M-Pesa statements after the fact.
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