Many Kenyans are earning from rental properties, but not all know how to correctly declare and pay tax on this income.
Filing residential rental income tax is a legal obligation for landlords whose rental earnings fall between Ksh 288,000 and Ksh 15 million per year.
This guide explains how to file for residential rental income tax in Kenya in simple steps. It also outlines who qualifies, the applicable tax rate, deadlines, and penalties for late filing or payment.
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. It applies to resident individuals and companies whose total annual rent income is between Ksh 288,000 and Ksh 15 million.
That means landlords earning at least Ksh 24,000 per month from residential tenants qualify for this tax bracket. This tax regime does not apply to:
- Non-residents
- Landlords earning less than Ksh 288,000 or more than Ksh 15 million annually
- Taxpayers who choose to remain under the annual income tax regime
In such cases, landlords must file standard annual tax returns and declare rental income along with income from other sources.
Tax Rate and Filing Process for Residential Rental Income
Residential Rental Tax Rate
The residential rental income is taxed at a flat rate of 10% on gross rent collected. This rate is final—meaning no deductions are allowed for maintenance costs, agent fees, loan interest, or other expenses.
You must file returns monthly, even if rent is paid quarterly, bi-annually, or annually. If you do not receive any rent in a given month, you are still required to file a NIL return.
Key Features:
- 10% tax on gross rental income
- No deductions allowed
- Monthly returns are mandatory
- Final tax—no need to declare in annual income return
How To File Residential Rental Tax Online
You can file your rental tax easily using KRA’s iTax portal or the KRA M-Service App. Here are the steps:
- Login to iTax
Visit https://itax.kra.go.ke and log in using your PIN and password. - Navigate to the Rental Income Return Form
Go to Returns > File Return > Income Tax – Resident > Monthly Rental Income Return. - Fill the Form
Enter the gross rental income earned during the month. The system automatically calculates 10% of the amount as tax due. - Submit and Download Acknowledgement Slip
Once the form is complete, click Submit and download the acknowledgement receipt for your records. - Make Payment
Generate a payment slip (PRN) and pay through KRA partner banks or mobile money services like Mpesa.
iTax Tip: If you did not collect any rent during the month, file a NIL return using the same process.
Penalties and Interest for Late Filing or Payment
Failing to file or pay rental tax on time attracts heavy penalties.
Late Filing Penalties
- Individuals—Ksh 2,000 or 5% of tax due, whichever is higher
- Corporates—Ksh 20,000 or 5% of tax due, whichever is higher
Late Payment Penalties
- 5% of the unpaid tax
- 1% monthly interest until the full amount is paid
To avoid these charges, always file by the 20th of the following month.
Example: Rent earned in January must be filed and paid by 20th February.
Final Notes on How To File For Residential Rental Income Tax In Kenya
Filing and paying residential rental income tax in Kenya is now easier, thanks to iTax and the KRA M-Service App. The key is to remain compliant by filing your returns monthly—even if you didn’t receive rent. KRA does not allow deductions for expenses under this tax regime, so landlords must work with gross figures.
If your annual rental income falls outside the Ksh 288,000–15 million bracket, you must declare your rental income under the annual income tax return instead.
Staying compliant not only avoids penalties but also positions you as a responsible taxpayer, which is essential for future access to government services, loans, and other benefits tied to tax compliance.
