KRA rental income tax: a plain guide for landlords
If you earn rent from residential property in Kenya, you likely owe Monthly Rental Income tax (MRI). Here is how it works, worked through with real numbers.
Who pays it
Resident landlords whose gross rent from residential property is more than KES 288,000 and not more than KES 15 million a year. Above that, or for commercial property, rent is taxed under the normal income tax rules instead.
The rate and how to work it out
MRI is 7.5% of the gross rent you received in the month (it was 10% before January 2024). Gross means the rent itself, before any costs: repairs, caretaker pay and mortgage interest can't be deducted.
| Rent received in the month | KES 150,000 |
|---|---|
| MRI at 7.5% | KES 11,250 |
Only rent you actually received counts. If two tenants didn't pay, that month's tax is on what came in; when they pay later, it counts in the month you receive it.
When to file and pay
File the MRI return on iTax and pay by the 20th of the following month: January's rent by 20 February, and so on. File a nil return for a month with no rent received.
Penalties
Filing late attracts a penalty, and paying late adds a penalty plus interest on the unpaid tax every month until it's cleared. Small monthly amounts add up quickly, which is why a reminder before the 20th matters.
Keeping records
Keep each payment's date, amount, tenant and M-Pesa or bank reference. If KRA asks, those records are how you show what you received each month.
Let Nyumba work it out every month
Nyumba adds up the rent you actually received, works out the 7.5%, reminds you before the 20th and gives you a year-end summary laid out the way iTax asks for it.
This guide is general information, not tax advice. Rates and thresholds change with each Finance Act; check the current rules on kra.go.ke or with your tax adviser.