The Kenya Revenue Authority (KRA) issued its rental income tax guidelines for the 2026/2027 fiscal year on 19 October 2026, setting out the parameters of the Monthly Rental Income (MRI) tax system.

Residential landlords whose total annual rental receipts are below KSh 288,000 – equivalent to KSh 24,000 per month – are not required to pay MRI tax.

The exemption applies solely to the MRI regime; landlords in this bracket may still have obligations under the standard annual income‑tax framework depending on their overall tax profile.

Those earning between KSh 288,000 and KSh 15 million a year must remit MRI tax at a rate of 7.5 % of gross rent each month, a rate that has been effective since 1 January 2024.

Landlords whose annual rental income exceeds KSh 15 million, as well as owners of commercial properties, fall outside the MRI framework and must declare rental earnings under the regular annual income‑tax regime.

Non‑resident landlords are taxed under a separate final‑tax rule introduced by the Finance Act 2026, which imposes a 30 % levy on gross rent with filing and payment due by the 20th day of the month following the rental period.

For landlords subject to MRI tax, returns and payments must be submitted by the 20th day of the month after rent is received; for example, September rent must be declared and paid by 20 October.

Late filing attracts a penalty of KSh 2,000 or 5 % of the tax due, whichever is higher, while late payment incurs a 5 % surcharge plus interest of 1 % per month on the outstanding amount.

The guidelines also require eligible landlords to pay an Affordable Housing Levy of 1.5 % on gross rental income, adding another compliance element.

To facilitate compliance, KRA has launched an Electronic Rental Income Tax System on the eCitizen platform, enabling online registration, filing and payment for landlords within the MRI band.