How much is rental income tax in Kenya?

Resident landlords earning between KES 288,000 and KES 15 million in gross rent per year pay Monthly Rental Income (MRI) tax at 7.5% of gross rent, with no deductions allowed.

MRI is filed and paid on iTax by the 20th of the month following the month the rent was earned.

Who can opt out of MRI?

Landlords earning above KES 15 million a year, non-residents, or those who write to the KRA Commissioner opting out, file under the normal income tax regime instead.

Rental income tax in Kenya: what landlords pay in 2026

If you rent out a home, flat or commercial unit in Kenya, the Kenya Revenue Authority (KRA) wants its share. Here's exactly how Monthly Rental Income (MRI) tax works in 2026 and how to stay compliant.

What is rental income tax in Kenya?

Rental income tax is what the KRA charges on rent you collect from tenants. Since 2016, most resident landlords have paid it through the simplified Monthly Rental Income (MRI) regime — a flat 7.5% of gross rent, with no deductions for repairs, agent fees or loan interest.

Who pays MRI at 7.5%?

You are a resident individual or company
Your gross annual rental income is between KES 288,000 and KES 15,000,000
The income is from residential or commercial property located in Kenya

Earn less than 288,000 a year? You're below the bracket and only file an annual return. Earn more than 15 million? You file under the standard income tax regime, where deductions are allowed but rates are higher.

How much will I pay? A worked example

Say you own a 2-bedroom in Kileleshwa let at KES 45,000/month.

Gross rent for the month: KES 45,000
MRI due (7.5%): KES 3,375
Annual gross rent: KES 540,000
Total MRI for the year: KES 40,500

How to file and pay on iTax

Log into iTax with your KRA PIN.
Go to Returns → File Return → Income Tax — Rent Income.
Select the month, enter gross rent collected, and submit. iTax calculates the 7.5%.
Generate a Payment Registration Number (PRN).
Pay via M-Pesa Paybill 222222, bank or KRA agent, using the PRN as the account number.

Deadline: the 20th of the following month. A nil return is required even if no rent was collected.

Penalties for late filing

Late filing: KES 2,000 or 5% of tax due, whichever is higher.
Late payment: 5% of the tax due, plus 1% interest per month.

Tips to stay on top of it

Issue receipts for every rent payment and keep a monthly ledger per unit.
Set a phone reminder for the 15th of each month — you'll never miss the 20th deadline.
Open a separate M-Pesa till or bank account for rent so your records are clean at year-end.

Make rent collection easier

Mnyumba Connect lets you list your property, track tenants and record rent payments in one dashboard — so your MRI filing is as simple as copying the monthly total into iTax.

This guide is general information, not tax advice. Confirm details with the KRA or a registered tax agent for your specific situation.