Rental Income Tax in Kenya
Complete guide to calculating and filing tax on rental income.
How Rental Income is Taxed
In Simple Terms
Residential rental income is often taxed under the Monthly Rental Income regime. Where that regime applies, tax is charged at 7.5% of gross monthly rent, so you do not first deduct expenses to arrive at the simplified MRI tax.
Worked Example
You rent out a property for KES 50,000 per month under the Monthly Rental Income regime:
Monthly gross rent:KES 50,000
MRI rate:7.5%
Monthly tax payable:KES 3,750
Approximate annual MRI tax:KES 45,000
If you are outside the simplified MRI regime, your rental income may instead fall under the ordinary income tax rules and deductible expenses then become relevant.
Allowable Expenses
What You Can Deduct
These expenses are generally relevant where rental income is taxed under the ordinary income tax rules rather than the simplified MRI regime.
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
- Where the Monthly Rental Income regime applies, tax is filed and paid monthly at 7.5% of gross rent
Calculate Your Rental Tax
Use our calculator to work out your tax liability.