Rental income has become a major source of earnings for many Kenyans, especially in urban and peri-urban areas. However, earning rent also comes with a legal responsibility: declaring and paying residential rental income tax.
The Kenya Revenue Authority (KRA) requires landlords whose residential rental income falls within a specific range to file and pay tax monthly. This guide explains how to file for residential rental income tax in Kenya, who qualifies, applicable tax rates, deadlines, and penalties—using clear, practical steps.
How To File for Residential Rental Income Tax in Kenya
Residential rental income tax is a monthly tax charged on rent earned from residential properties in Kenya. It applies to resident individuals and companies whose annual gross rental income is between:
- Ksh 288,000 and Ksh 15 million per year
- Equivalent to Ksh 24,000 or more per month
Who This Tax Applies To
- Resident landlords (individuals or companies)
- Owners of residential rental property
- Landlords earning within the Ksh 288,000–15 million annual range
Who Is Exempt From This Regime
This monthly rental tax does not apply to:
- Non-resident landlords
- Landlords earning below Ksh 288,000 annually
- Landlords earning above Ksh 15 million annually
- Taxpayers who opt to remain under the annual income tax regime
Landlords outside this bracket must declare rental income in their annual income tax return, together with other income sources.
Tax Rate and Filing Process for Residential Rental Income
Residential Rental Tax Rate in Kenya
Residential rental income is taxed at a flat rate of 10% on gross rent collected.
Key features of this tax:
- 10% tax on gross rental income
- No deductions allowed (no repairs, agent fees, loan interest, or maintenance costs)
- Filed monthly, regardless of how often rent is paid
- Final tax – rental income is not declared again in annual returns
- NIL returns required if no rent is collected in a month
How To File Residential Rental Tax Online (Step-by-Step)
You can file your return using the iTax portal or the KRA M-Service App.
Filing via the iTax Portal
- Log in to iTax
Visit the iTax portal and sign in using your KRA PIN and password. - Open the Rental Income Return Form
Go to:
Returns → File Return → Income Tax – Resident → Monthly Rental Income Return - Fill in Rental Income Details
Enter the gross rent earned for the month.
The system automatically calculates 10% tax payable. - Submit the Return
Submit the form and download the acknowledgement receipt for your records. - Make Payment
Generate a Payment Registration Number (PRN) and pay via:- KRA-appointed banks
- Mobile money services such as M-Pesa
Important iTax Tip
If you did not collect rent in a given month, you must still file a NIL return using the same process.
Penalties and Interest for Late Filing or Payment
Failure to comply attracts penalties and interest, which accumulate quickly.
Late Filing Penalties
- Individuals: Ksh 2,000 or 5% of tax due (whichever is higher)
- Companies: Ksh 20,000 or 5% of tax due (whichever is higher)
Late Payment Penalties
- 5% penalty on unpaid tax
- 1% interest per month until the tax is fully paid
Filing Deadline
Rental income earned in a given month must be filed and paid by the 20th of the following month.
Example:
Rent earned in January → File and pay by 20th February
Final Notes on Filing Residential Rental Income Tax in Kenya
Filing residential rental income tax in Kenya is now straightforward thanks to iTax and the KRA M-Service App. The most important rules to remember are:
- File monthly, even when no rent is received
- Use gross rental income (no deductions allowed)
- Pay on time to avoid penalties and interest
- Confirm whether your income falls within the Ksh 288,000–15 million bracket
If your rental income falls outside this range, declare it under the annual income tax return instead.
Staying compliant not only protects you from penalties but also strengthens your tax profile—important for accessing government services, loans, and other benefits tied to tax compliance.
