Rental Income Tax in Kenya
Complete guide to calculating and filing tax on rental income.
How Rental Income is Taxed
In Simple Terms
When you rent out property, the money you receive is taxable income. However, you can deduct many expenses related to the property before calculating tax. The remaining amount (rental income minus expenses) is taxed at your normal income tax rate (same as PAYE rates).
Worked Example
You rent out a property for KES 50,000 per month:
Annual rental income:KES 600,000
Less: Allowable expenses:-KES 120,000
Taxable rental income:KES 480,000
Tax payable (at 30%):KES 144,000
Allowable Expenses
What You Can Deduct
Repairs and maintenance
Property management fees
Insurance premiums
Property rates and land rent
Legal and professional fees
Advertising for tenants
Cleaning and security services
Utility bills (if paid by landlord)
Interest on mortgage/loans
Depreciation (wear and tear)
What You Cannot Deduct
- Capital improvements (these add to property value)
- Personal expenses
- Principal loan repayments (only interest is deductible)
- Expenses for personal use of the property
Filing Requirements
- Rental income must be declared in your annual tax return (ITR)
- Due by June 30th each year
- Keep all receipts and invoices for at least 5 years
- If rental income exceeds KES 144,000/year, you may need to pay installments
Calculate Your Rental Tax
Use our calculator to work out your tax liability.