Rental Income Tax in Kenya 2026: How Much Will You Really Pay?
Residential landlords in Kenya pay a flat 7.5% on gross rent under the MRI regime in 2026. We explain who qualifies, what is exempt, how to file, and what the new 2026 draft rules mean for you.
If you rent out a house, flat or bedsitter in Kenya, the taxman wants a share, but the rules are simpler than most landlords fear. The Monthly Rental Income (MRI) regime charges a flat rate on gross rent, with no need to itemise expenses. Here is exactly who pays, how much, and how to stay compliant in 2026.
Who pays MRI, and who does not
| Annual residential rent | What applies |
|---|---|
| Below KES 280,000 | Exempt from MRI |
| KES 280,000 – 15 million | Flat 7.5% MRI (final tax) |
| Above KES 15 million | Normal income tax (expenses deductible) |
MRI covers resident landlords earning from residential property. Commercial-property rent and non-resident landlords fall outside MRI and are taxed under the ordinary rules instead.
How the 7.5% works
The beauty, and the catch, of MRI is that it is charged on gross rent received, with no deduction for repairs, agent fees, loan interest or vacancies. What you collect is what you are taxed on.
| Monthly rent collected | MRI at 7.5% | Annual MRI |
|---|---|---|
| KES 30,000 | KES 2,250 | KES 27,000 |
| KES 50,000 | KES 3,750 | KES 45,000 |
| KES 100,000 | KES 7,500 | KES 90,000 |
How and when to file
MRI is filed on iTax by the 20th of the following month. For any month you collect no rent, you still file a NIL return, skipping it invites penalties even though no tax is due. You can pay monthly, quarterly or annually, but the monthly return is what keeps you compliant.
Before you buy a rental, count all the costs
Rental tax is only one slice of a property’s economics. When buying, factor the one-off stamp duty (4% in towns, 2% rural) into your entry cost, and compare the post-tax yield against other options with the Investment Calculator, sometimes a money market fund beats a low-yield flat once tax and hassle are counted.
Frequently asked questions
For most Kenyan landlords, rental tax in 2026 is refreshingly simple: 7.5% of gross rent, filed monthly on iTax, with NIL returns for empty months. Keep it clean and the taxman is no threat to your returns. Work out your exact bill with the Rental Income Tax Calculator, and weigh property against other investments before you buy your next unit.