KRA exempts landlords earning under Sh288,000 a year from monthly rental tax

Residential landlords who collect less than Sh288,000 a year in rent will not be subjected to Kenya’s Monthly Rental Income (MRI) tax, according to updated guidelines released by the Kenya Revenue Authority on Monday.

"Landlords who earn rental income which is less than Ksh288,000 per year are exempt from Monthly Rental Income (MRI) Tax," the authority said in the guideline document. The threshold works out to roughly Sh24,000 a month and shields small-scale and informal investors from the monthly filing and remittance cycle.

At the other end of the scale, landlords earning more than Sh15 million a year from rental property are also excluded from the standard monthly framework, with their portfolios falling under alternative tax classification procedures, KRA said.

The authority clarified that the monthly rental income structure does not apply to commercial real estate, so landlords earning from retail shops, office complexes and industrial space are handled under a different segment of the tax administration system.

Landlords who are liable cannot deduct maintenance costs, operational expenses or capital losses. "No expenses, losses or capital deductions are allowed for deduction from the gross rent," KRA said, adding that the Affordable Housing Levy of 1.5 per cent of gross rental income applies to every eligible landlord.

Non-residents earning rent from property in Kenya fall under a separate regime that took effect on 1 July 2026 and must remit 30 per cent of total rent collected, for both residential and commercial assets. Returns and payments are due by the 20th day of the following month, with late filing attracting a penalty of Sh2,000 or 5 per cent of the tax due for individuals, and late payment a further 5 per cent on the outstanding principal.