Monthly rental income tax: a practical guide for landlords
Residential landlords within the set income band file and pay rental income tax every month. Here is how it works and what to keep.
By HMG Editorial Team · Published
Who it applies to
Monthly rental income tax applies to resident individuals and companies that earn residential rental income within a set annual band. At the time of writing the band is more than KES 288,000 and up to KES 15 million a year, and the rate is 7.5% of gross rent. Confirm the current figures with KRA before you file.
Landlords above the band, and commercial rental income, are taxed under the normal income tax rules instead, where allowable expenses are deducted.
Filing and paying
The tax is charged on gross rent received, with no deduction for expenses, and is filed and paid on iTax by the 20th of the following month. A month with no rent still needs a nil return if you are registered for the obligation.
Some tenants, such as certain organisations appointed as withholding agents, may deduct the tax and remit it for you. Keep their certificates so you are not taxed twice.
Records that save you trouble
Keep a simple schedule per property: tenant, monthly rent, amount received, date and any arrears. Match it to bank and mobile money statements every month, because KRA can compare declared rent with other data such as utility and land records.
If you own several properties or rent through a company, review whether the monthly regime or the normal regime applies, since the answer affects both the rate and what you can deduct.
This article is general guidance only and is not individual tax, legal or accounting advice. Rules change; confirm your position with an HMG consultant before acting.
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