Monthly rental income tax in Kenya: who pays, how much and how to file

If you earn rent from a house or flat, you probably owe monthly rental income tax in Kenya. This tax is called MRI for short. It is simple once you know the rules. You pay a flat rate on the rent you collect, every month, through KRA's iTax system.

This guide explains who pays, how much, and how to file. It uses real rents from ISHI Homes listings to show the sums.

Important: Tax rules change, often through the yearly Finance Act. The rate and limits below are correct to the best of our knowledge at the time of writing. Always confirm the current figures on the KRA website (kra.go.ke) or with a tax adviser before you file.

What is monthly rental income tax?

Monthly rental income tax is a tax on the rent you earn from residential property. Residential means homes people live in: bedsitters, apartments, bungalows and maisonettes.

Key points:

• It is charged on gross rent. Gross rent is the full rent you receive, before you take off any costs.
• You cannot deduct expenses such as repairs, service charge, land rates or loan interest.
• It is a final tax. This means once you pay it, you do not declare that rent again in your annual income tax return.

Who pays monthly rental income tax in Kenya?

MRI applies to Kenyan residents - both individuals and companies - who earn residential rent within this yearly band:

Yearly residential rent	What applies
Below KES 288,000	Not under MRI. Declare the rent in your annual income tax return.
KES 288,000 to KES 15,000,000	MRI at 7.5% of gross rent, filed monthly
Above KES 15,000,000	Not under MRI. Rent is taxed under normal income tax rules, where expenses can be claimed.

KES 288,000 a year works out to KES 24,000 a month. Add up rent from all your residential units, not just one.

The landlord pays the tax, not the tenant. An agent or property manager can file and pay on the landlord's behalf, but the landlord stays responsible if it is not done.

MRI does not cover:

• Commercial property such as shops, offices and warehouses. That rent is taxed under normal income tax rules, and some tenants deduct withholding tax before paying you.
• Non-resident landlords. Rent paid to a non-resident is usually subject to withholding tax, which the tenant or agent deducts.

How much is the rate?

The current MRI rate is 7.5% of gross rent. It came down from 10% under the Finance Act 2023, starting 1 January 2024.

The formula is simple:

Tax due = rent received in the month x 7.5%

Worked examples

These examples use median rents from ISHI Homes listings, as of 25 Oct 2026.

Example 1: One 1 bedroom flat

Amina rents out one 1 bedroom apartment at KES 15,750 a month (the median across our listings).

• Yearly rent: KES 15,750 x 12 = KES 189,000
• This is below KES 288,000, so Amina is not under MRI.
• She declares the rent in her annual income tax return instead.

Example 2: One 2 bedroom flat

John rents out a 2 bedroom apartment at KES 28,000 a month.

• Yearly rent: KES 336,000 - inside the MRI band
• Monthly tax: KES 28,000 x 7.5% = KES 2,100
• Yearly tax: KES 25,200

Example 3: A block of bedsitters

Mary owns 10 bedsitters in Kahawa Wendani, each at KES 8,500 a month.

• Monthly rent: KES 85,000
• Yearly rent: KES 1,020,000 - inside the band
• Monthly tax: KES 85,000 x 7.5% = KES 6,375

If two units are empty one month and she collects KES 68,000, her tax that month is KES 5,100. You pay on rent actually received.

Example 4: Higher-end flats

A company lets four 2 bedroom apartments in Kilimani at KES 71,500 each.

• Monthly rent: KES 286,000
• Yearly rent: KES 3,432,000 - inside the band
• Monthly tax: KES 286,000 x 7.5% = KES 21,450

Quick table

Monthly rent collected	MRI at 7.5%
KES 30,000	KES 2,250
KES 50,000	KES 3,750
KES 100,000	KES 7,500
KES 250,000	KES 18,750
KES 500,000	KES 37,500

What counts as rent?

• Monthly rent you receive counts.
• Deposits you hold and later refund are not rent.
• If you keep a deposit to cover unpaid rent, that money becomes rent and is taxed in the month you keep it.
• Rent paid in advance is generally taxed when you receive it.
• If you collect nothing in a month, you still file - a nil return.

How to file and pay on iTax

You need a KRA PIN with the rental income obligation added. If your PIN does not show it, add it on iTax or ask at a KRA office.

Steps:

1. Log in to iTax (itax.kra.go.ke) with your PIN and password.
2. Go to Returns, then File Return.
3. Choose the tax obligation Monthly Rental Income.
4. Pick the month you are filing for.
5. Enter your property details and the rent received from each unit.
6. Submit. iTax works out the tax for you.
7. Generate a payment slip.
8. Pay through M-Pesa (KRA Paybill), bank or other channels shown on the slip, using the payment registration number.

Keep your acknowledgement receipt and payment confirmation.

When is it due?

File and pay on or before the 20th of the following month. For example, rent collected in March is due by 20 April.

If you miss the deadline, KRA charges a late filing penalty, a late payment penalty and monthly interest on unpaid tax. These add up fast, so set a reminder.

Tips for landlords and agencies

• Record every payment. Note the tenant, unit, amount and date. KRA can ask for proof.
• Set aside 7.5% of each rent payment as it comes in, so the tax is ready by the 20th.
• Add up all properties. Owning units in different towns does not split them into separate bands.
• Agencies: keep each landlord's rent separate, and agree in writing who files and pays.
• Get help for complex cases such as joint ownership, mixed residential and commercial buildings, or rent close to KES 15 million a year.

See ISHI in action

Tracking rent across many units makes MRI much easier. ISHI property management software records every payment, shows what each property collected each month, and gives you clear statements to file from.

Book a free demo at www.ishi.digital/contact, call 0116888777 or email hello@ishi.digital.