Kenya Rental Income Tax Calculator 2025
Calculate how much tax you need to pay on your rental income - Updated with correct 2025 rules
?? Important Terms Explained Simply:
- Gross Rent: Total rent money you collect from tenants BEFORE any expenses. If tenant pays KES 50,000, that's your gross rent.
- MRI (Monthly Rental Income): The simple 7.5% tax on residential rent between KES 24,000-1,250,000 per month.
- Withholding Agent: Banks, government offices, or big companies that KRA has officially appointed to deduct 10% tax when they pay rent. Regular tenants (individuals) are NOT withholding agents.
- Final Tax: Once you pay this tax, you're done - no need to include it in your annual tax return.
?? How Rental Tax Works in Kenya (2025)
If You're a Kenyan Resident Landlord:
- � Earn LESS than KES 24,000/month: NO TAX! You're exempt ??
- � Earn KES 24,000 - 1,250,000/month: YOU pay 7.5% to KRA yourself every month by 20th
- � Earn MORE than KES 1.25M/month: File annual tax return, can claim expenses
- ?? Your regular tenant does NOT pay tax for you! Only appointed agents (banks, government) do.
If You Live Outside Kenya (Diaspora):
- � Your tenant DOES withhold 30% and pays KRA directly
- � This is FINAL tax - you don't file any returns
Your Property Details
?? If your tenant is a regular person/individual, select NO. Only banks, government, and KRA-appointed companies are withholding agents.
?? What to enter: The TOTAL rent money you collect each month. If you have multiple properties, add them together.
?? Quick Guide
Residential Property
- � Below KES 24K/month: FREE!
- � KES 24K - 1.25M/month: 7.5%
- � Above 1.25M/month: Annual return
- � YOU pay (not tenant)
- � Due: 20th of next month
Who Withholds Tax?
? Regular Tenants DON'T
Individual tenants don't withhold tax
? Only These Withhold:
- � Banks
- � Government offices
- � KRA-appointed companies
- � ALL non-resident landlords
?? Penalties
Late Filing:
- � Individual: 5% or KES 2,000
- � Company: 5% or KES 20,000
Late Payment:
- � 5% penalty + 1% monthly interest
?? How to File
- Go to iTax.kra.go.ke
- Login with your PIN
- Returns ? File Return
- Select "Rent Income"
- Enter rental amount
- Submit & Pay by 20th
?? Key Facts
- � 7.5% is on GROSS rent
- � No expense deductions
- � It's "final tax"
- � File even if no rent (nil return)
Rental Income Tax Rates Kenya 2025 - Complete Breakdown
Two tax options for rental income in Kenya: Residential Rental Income Tax (10% flat on gross rent) or standard PAYE rates (10-35% on net profit). Choose wisely - wrong choice costs thousands!
| Monthly Rental Income | Annual Income | Option 1: Residential Tax (10% gross) | Option 2: PAYE (on 70% net) | Best Option | Savings |
|---|---|---|---|---|---|
| KES 15,000 | KES 180,000 | KES 18,000 (10%) | KES 4,032 (on KES 126K taxable) | PAYE better | Save KES 13,968/year! |
| KES 30,000 | KES 360,000 | KES 36,000 (10%) | KES 27,456 (on KES 252K taxable) | Residential Tax better | Marginal - almost equal |
| KES 50,000 | KES 600,000 | KES 60,000 (10%) | KES 66,576 (on KES 420K taxable) | Residential Tax better | Save KES 6,576/year |
| KES 100,000 | KES 1,200,000 | KES 120,000 (10%) | KES 166,176 (on KES 840K taxable) | Residential Tax better | Save KES 46,176/year! |
| KES 200,000 | KES 2,400,000 | KES 240,000 (10%) | KES 408,576 (on KES 1.68M taxable) | Residential Tax better | Save KES 168,576/year! |
| KES 500,000 | KES 6,000,000 | KES 600,000 (10%) | KES 1,288,576 (on KES 4.2M taxable) | Residential Tax better | Save KES 688,576/year! |
?? Which Tax Option Should You Choose?
- Residential Rental Tax (10% flat): Simple! 10% of gross rent. No deductions allowed. Best for rental income above KES 30,000/month.
- PAYE Option: 30% deductions allowed (maintenance, insurance, management). Then tax 10-35% on profit. Best for low rent (under KES 25K/month) or high expenses.
- Break-Even Point: Around KES 25,000-30,000/month. Below = PAYE better. Above = Residential Tax better.
- Can't Switch: Once you choose for a tax year, you're locked in until next year. Choose wisely!
- Commercial Property: Must use PAYE option (no 10% flat tax). Offices, shops, warehouses = PAYE only.
Real Examples: Residential vs PAYE Tax on Rental Income Kenya 2025
See exactly how much tax you'll pay under each option with real scenarios. Includes expenses, deductions, and final tax owed.
?? Example 1: Bedsitter KES 12,000/month (KES 144,000/year)
Option 1: Residential Tax (10%)
- � Gross Rent: KES 144,000
- � Tax Rate: 10%
- Tax Owed: KES 14,400
Option 2: PAYE (with 30% deductions)
- � Gross Rent: KES 144,000
- � Less: 30% deemed expense: KES 43,200
- � Taxable Income: KES 100,800
- � PAYE Tax (10-25%): KES 1,776
- Tax Owed: KES 1,776
? Winner: PAYE Option saves KES 12,624 per year!
?? Example 2: 2BR Apartment KES 40,000/month (KES 480,000/year)
Option 1: Residential Tax (10%)
- � Gross Rent: KES 480,000
- � Tax Rate: 10%
- Tax Owed: KES 48,000
Option 2: PAYE (with 30% deductions)
- � Gross Rent: KES 480,000
- � Less: 30% deemed expense: KES 144,000
- � Taxable Income: KES 336,000
- � PAYE Tax (10-30%): KES 52,176
- Tax Owed: KES 52,176
? Winner: Residential Tax (10%) saves KES 4,176 per year
?? Example 3: Multiple Units KES 150,000/month (KES 1,800,000/year)
Option 1: Residential Tax (10%)
- � Gross Rent: KES 1,800,000
- � Tax Rate: 10%
- Tax Owed: KES 180,000
Option 2: PAYE (with 30% deductions)
- � Gross Rent: KES 1,800,000
- � Less: 30% deemed expense: KES 540,000
- � Taxable Income: KES 1,260,000
- � PAYE Tax (10-35%): KES 310,176
- Tax Owed: KES 310,176
? Winner: Residential Tax (10%) saves KES 130,176 per year!
?? Common Rental Tax Mistakes to Avoid
- � Not Declaring Rental Income: KRA tracks M-Pesa rent payments. Under-reporting triggers audits + 100% penalty!
- � Mixing Residential + Commercial: If you have both (e.g., shop + apartments), MUST use PAYE for all. Can't split.
- � Not Paying Quarterly: Residential Tax due quarterly (20th Apr, Jul, Oct, Jan). Late = 5% penalty.
- � Switching Mid-Year: Can't change tax option during year. Locked until Jan 1 next year.
- � Claiming Both Reliefs: If using 10% flat rate, you can't also claim mortgage interest deduction. Pick one!
- � Airbnb Confusion: Short-term rentals (Airbnb) = tourism tax (different rules). Not covered by Residential Tax option.
Related Property & Tax Calculators
Explore other Kenya property and tax calculators
Stamp Duty Calculator
Calculate stamp duty when buying property
Mortgage Calculator
Calculate monthly mortgage repayments
PAYE Calculator
Calculate income tax and net salary
Planning to Invest in Property?
These calculators can help with property investment:
How to File Rental Tax in Kenya
Calculate Tax
Use calculator above to know exactly how much tax you owe (7.5% of gross rent)
Login to iTax
Visit itax.kra.go.ke and log in with your KRA PIN
File MRI Return
Go to Returns ? Monthly Rental Income, enter amount, submit
Pay by 20th
Pay via M-Pesa, bank, or online by 20th of following month
?? Important: The deadline is the 20th of the following month. For example, January rent must be filed and paid by February 20th. Late filing attracts 5% penalty or KES 2,000 (whichever is higher) + 1% monthly interest.
Frequently Asked Questions About Rental Tax in Kenya
What is the rental income tax rate in Kenya for 2025??
The rental income tax rate depends on your property type, residency status, and income level:
| Situation | Tax Rate | Details |
|---|---|---|
| Residential (KES 0-24K/month) | 0% - EXEMPT | Annual rent below KES 288,000 |
| Residential (KES 24K-1.25M/month) | 7.5% | Monthly Rental Income (MRI) tax - final tax |
| Residential (>KES 1.25M/month) | Up to 35% | Individual income tax rates (can deduct expenses) |
| Non-resident landlord (Diaspora) | 30% | Withheld by tenant - final tax |
| Commercial property | 10% or up to 35% | 10% withheld if agent, file annual return |
Do I pay rental tax myself or does my tenant pay it for me??
This is the most common confusion! Here's the clear answer:
? For MOST Landlords: YOU Pay the Tax Yourself
If you're a Kenyan resident renting to:
- Regular individuals (people)
- Small businesses
- Anyone who is NOT a KRA-appointed withholding agent
You MUST:
- Calculate 7.5% of your gross rent yourself
- File MRI return on iTax by 20th of following month
- Pay the tax directly to KRA
? Tenant Pays Tax ONLY If:
- You're a non-resident landlord (Diaspora): ALL tenants must withhold 30%
- Your tenant is a KRA-appointed withholding agent:
- Banks and financial institutions
- Government ministries and departments
- State corporations
- Large companies appointed by KRA
?? Common Mistake: Many landlords think their tenant pays the tax automatically. This is WRONG! Unless your tenant is diaspora's tenant or a withholding agent, YOU must file and pay yourself. Failure to do so results in penalties!
When is rental tax due and how do I file it??
Rental tax is due by the 20th of the following month.
Example Timeline:
- � January rent collected ? File & pay by February 20th
- � February rent collected ? File & pay by March 20th
- � March rent collected ? File & pay by April 20th
How to File MRI (Monthly Rental Income) Tax:
- Visit itax.kra.go.ke
- Log in using your KRA PIN and password
- Click on "Returns" in the main menu
- Select "File Returns"
- Choose "Monthly Rental Income (MRI)"
- Select the tax period (month/year)
- Enter your total gross rental income for that month
- System automatically calculates 7.5% tax
- If withholding agent paid 10%, enter that amount
- Review and submit the return
- Make payment via:
- M-Pesa (Paybill 572572, Account: Your KRA PIN)
- Bank deposit/transfer
- iPay (online card payment)
- Download payment receipt and acknowledgement
?? Penalties for Late Filing:
- Late filing penalty: 5% of tax due or KES 2,000 (whichever is higher)
- Late payment penalty: 5% of tax due
- Interest: 1% per month on unpaid tax
Filing guide: KRA Monthly Rental Income Guide
Can I deduct expenses from my rental income before paying tax??
The answer depends on which tax regime you're using:
? Monthly Rental Income (MRI) Tax @ 7.5% - NO Deductions
If you earn KES 24,000 - 1,250,000/month and use the simple 7.5% tax:
- You CANNOT deduct any expenses
- Tax is calculated on GROSS rental income only
- Repairs, maintenance, agent fees, insurance - none can be deducted
- 7.5% is a flat rate on total rent collected
Example: If you collect KES 100,000 rent and spent KES 30,000 on repairs, you still pay 7.5% of KES 100,000 = KES 7,500 (not on KES 70,000)
? Annual Income Tax Return - YES, Deduct Everything
If you earn MORE than KES 1.25M/month OR choose to file annual return:
- You CAN deduct all legitimate expenses:
Deductible Expenses:
- Repairs and maintenance
- Property management fees
- Agent commissions
- Insurance premiums
- Service charge
- Advertising for tenants
More Deductions:
- Mortgage interest (NOT principal)
- Land rates and taxes
- Security costs
- Legal fees
- Depreciation
- Accountant fees
Net Rental Income = Gross Rent - All Expenses
You pay tax on the NET amount at individual rates (10%-35%)
?? Which is Better? If your expenses are high (>30% of rent), filing annual return and deducting expenses may save you money compared to the flat 7.5% MRI tax. Consult a tax advisor to choose the best option.
What if I have multiple rental properties - how is tax calculated??
If you own multiple rental properties, you ADD all rental income together and file ONE MRI return per month.
Example:
You own 3 properties:
- � Property 1 (Apartment in Nairobi): KES 40,000/month
- � Property 2 (Bedsitter in Thika): KES 15,000/month
- � Property 3 (Shop in Nakuru): KES 25,000/month
Total Monthly Rental Income: KES 40,000 + 15,000 + 25,000 = KES 80,000
Monthly Tax @ 7.5%: KES 80,000 � 0.075 = KES 6,000
Net Monthly Income: KES 80,000 - 6,000 = KES 74,000
Important Points for Multiple Properties:
- One return per month: Don't file separate returns for each property - combine all rental income into one MRI return
- Gross income matters: Add ALL rent collected before calculating 7.5% tax
- Different property types: Residential and commercial properties are filed separately
- Residential: Use MRI at 7.5%
- Commercial: Must file annual return
- Exemption threshold applies to total: If total monthly rent is below KES 24,000, you're exempt
- High income threshold: If total monthly rent exceeds KES 1.25M, you must file annual return instead of MRI
?? Pro Tip: Keep separate records for each property (rent collected, expenses, tenant details) even though you file one combined return. This helps with accounting and if you decide to switch to annual return filing.
What happens if my tenant doesn't pay rent - do I still pay tax??
NO - You only pay tax on rent that you actually receive (cash basis).
? How Rental Tax Works for Non-Payment:
Rental income tax in Kenya uses the "cash basis" - you pay tax on money you actually collect, not on what tenants owe you.
Examples:
Scenario 1: Tenant pays on time
- Monthly rent: KES 50,000
- Tenant pays: KES 50,000 ?
- Tax you pay: 7.5% of KES 50,000 = KES 3,750
Scenario 2: Tenant doesn't pay
- Monthly rent owed: KES 50,000
- Tenant pays: KES 0 ?
- Tax you pay: 7.5% of KES 0 = KES 0
- You file NIL return (zero rental income)
Scenario 3: Tenant pays partial rent
- Monthly rent owed: KES 50,000
- Tenant pays: KES 30,000 (partial payment)
- Tax you pay: 7.5% of KES 30,000 = KES 2,250
What if Tenant Pays Later?
If a tenant pays arrears (late payment for previous months):
- Pay tax in the month you actually receive the money
- Example: Tenant owes January rent (KES 50,000), pays in March
- January return: KES 0 (nil return - no tax)
- March return: Include KES 50,000 arrears + current March rent
- Pay 7.5% tax on total amount received in March
Filing Requirements:
- You must STILL file a return even if you collect zero rent (nil return)
- Don't skip filing just because tenant didn't pay
- File by 20th of following month showing KES 0 income
- This keeps your tax compliance record clean
?? Pro Tip: Keep records of rent arrears separately. If you later take tenant to court and recover rent through a court order, you'll pay tax in the month you receive the court-ordered payment.
Where can I get official rental tax information and support??
Official KRA Resources for Rental Tax:
- ??KRA Residential Rental Income Guide: kra.go.ke/residential-rental-income
Complete guide to MRI tax, rates, filing procedures
- ??iTax Portal: itax.kra.go.ke
File MRI returns, make payments, view compliance status
- ??KRA Call Centre: 0711 099 999 / 0711 099 100
Monday - Friday: 8:00 AM - 5:00 PM (Rental tax support)
- ??Email Support: callcentre@kra.go.ke
Rental income tax queries and assistance
- ??Withholding Tax Guide: KRA Withholding Tax Blog
Detailed guide on who withholds rental tax
- ??Visit KRA Office: Times Tower (Nairobi) or Regional Offices
In-person assistance with MRI registration and filing
Payment Methods:
M-Pesa
- Paybill: 572572
- Account: Your KRA PIN
- Instant confirmation
Bank Transfer
- Any KRA bank account
- Use payment slip from iTax
- Keep transaction receipt
iPay (Online)
- Pay via credit/debit card
- Direct from iTax portal
- Immediate receipt
?? Tip: Before calling KRA, have your PIN, property details, and specific questions ready. For faster service, use the iTax chat support feature (available 8 AM - 5 PM weekdays).
Rental income tax calculator updated October 2025 - 7.5% rate (effective Jan 2024)
File via iTax by 20th of every month
?? Official Sources:
Based on KRA official sources and Finance Act 2023. Verified October 2025
Important Disclaimer
General Information Only: This calculator provides estimates based on publicly available information and standard rates. Results are for informational and educational purposes only and should not be considered as professional financial, legal, or tax advice.
Accuracy and Updates: While we strive to maintain accurate and up-to-date information using official sources including Kenya Revenue Authority (KRA), National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF), and other relevant government agencies, rates and regulations may change. Always verify current rates with official sources.
Seek Professional Advice: For specific tax planning, salary negotiations, financial decisions, or legal matters, please consult with qualified professionals such as certified accountants, tax advisors, financial planners, or legal practitioners who can consider your individual circumstances.
No Liability: Top Calculator and its operators accept no liability for any loss, damage, or inconvenience arising from the use of this calculator or reliance on its results. Users are responsible for verifying all calculations and information with official sources before making financial decisions.
Official Sources: For authoritative information, please refer to:
- Kenya Revenue Authority (KRA) - www.kra.go.ke
- National Social Security Fund - www.nssfkenya.co.ke
- Social Health Insurance Fund - www.sha.go.ke
Last updated: January 2025. This disclaimer applies to all calculators on Top Calculator.