I recently started earning income from rental property and realized I needed to file Residential Rental Income Tax in Kenya. At first, the process seemed confusing, especially with deadlines and tax rates.
If you’re a landlord, here’s a simple guide to help you file your rental income tax correctly.
Quick Answer
To file residential rental income tax, log in to iTax, declare your gross monthly rent, submit the return, and pay the computed 10% tax before the 20th of the following month.
What Is Residential Rental Income Tax?
Residential Rental Income Tax applies to:
- Individuals or companies earning rental income
- Annual income between KSh 288,000 and KSh 15 million
👉 Tax rate:
- Flat rate of 10% on gross rent
👉 Important:
- No deductions for expenses
- Filed monthly
Who Should File This Tax?
You should file if:
- You are a resident landlord
- Your rental income falls within the threshold
👉 Not applicable if:
- Income is below KSh 288,000
- Income exceeds KSh 15 million
- You are a non-resident
Step-by-Step: How to File Residential Rental Income Tax on iTax
Step 1: Visit iTax Portal
Go to the official KRA iTax portal.
Step 2: Log in to Your Account
Enter your:
- KRA PIN
- Password
Step 3: Select File Return
Click on File Return option.
Step 4: Choose Rental Income Tax
Select Residential Rental Income Tax (MRI).
Step 5: Enter Rental Details
Input your:
- Gross monthly rent received
👉 Tax will be automatically calculated (10%).
Step 6: Submit Return
Review details and click Submit.
Step 7: Generate Payment Slip
Create a payment registration slip.
Step 8: Make Payment
Pay via:
- M-Pesa
- Bank or other channels
Important Filing Rules
- File by the 20th of the following month
- File monthly returns
- Submit NIL return if no rent received
- This tax is final (no need to include in annual returns)
Penalties for Late Filing and Payment
Late Filing Penalty
- Individuals: KSh 2,000 or 5% of tax (whichever is higher)
- Companies: KSh 20,000 or 5% of tax (whichever is higher)
Late Payment Penalty
- 5% of tax due
- 1% interest per month until fully paid
Extra Tips and Best Practices
- File returns before the 20th deadline
- Keep accurate rental records
- Always file even if no income (NIL return)
- Use KRA mobile app for convenience
- Set reminders to avoid penalties
Common Mistakes to Avoid
- Filing late
- Forgetting NIL returns
- Declaring incorrect rent amounts
- Not paying tax after filing
- Assuming annual filing is enough
FAQ
What is the tax rate for rental income in Kenya?
It is 10% of gross rent.
Do I need to file if I didn’t receive rent?
Yes, you must file a NIL return.
Is rental income declared in annual returns?
No, it is treated as final tax.
Conclusion
Filing residential rental income tax in Kenya is simple once you understand the process. Just log in to iTax, declare your rent, and pay on time to avoid penalties.
