The Kenya Revenue Authority (KRA) announced that residential landlords whose annual rental earnings are below Ksh288,000 are exempt from the Monthly Rental Income (MRI) tax, which translates to earnings under Ksh24,000 per month.

Conversely, landlords receiving more than Ksh15 million a year from rentals are also excluded from the MRI regime, meaning they are subject to different tax rules.

For landlords who do not fall into either exemption category, the MRI tax is set at 7.5 percent of gross rental income, a rate that has been in force since 1 January 2024.

The MRI tax calculation does not allow any deductions for expenses, losses or capital allowances; the tax is levied on the total rent received.

In addition to the MRI tax, all eligible landlords must also pay the Affordable Housing Levy at 1.5 percent of gross rental income.

Non‑resident landlords are subject to a separate 30 percent tax on total rent collected, applicable to both residential and commercial properties, under rules introduced on 1 July 2026.

Landlords liable for MRI tax must file a return and remit payment by the 20th day of the following month; for example, September rent must be declared and paid by 20 October.

Late filing incurs a penalty of Ksh2,000 or 5 percent of the tax due, whichever is higher, while late payment attracts a 5 percent penalty.