Rental Income Tax Calculator Kenya 2026

Two ways rent is taxed

Rental income in Kenya is taxed under one of two routes, and which one applies depends on the landlord and the type of property.

Monthly Rental Income tax (MRI) is a simple tax on gross residential rent. It applies to a resident individual whose annual residential rent falls between KES 288,000 and KES 15,000,000. The rate is 7.5% of the rent received, no expenses are deducted, and the payment is a final tax on that income. You file and pay by the 20th of the month after the rent was received.

The annual income tax route applies to everything else: commercial rent, rent received by a company, rent received by a non-resident, and residential rent that is below or above the MRI range. Here you add up the rent, subtract allowable expenses and capital allowances, and tax the profit, using the individual tax bands for a resident person or the company rate for a company. You file an annual return by 30 June of the following year, and you may also have to pay instalment tax.

What the calculator does

You enter the owner type and each property: residential, commercial or mixed, the number of units and the monthly rent per unit, the months the property was occupied (so vacancies reduce rent), the annual expenses and capital allowances, and any withholding tax tenants have already deducted. You can add as many properties as you own; the calculator pools them, because MRI eligibility depends on total residential rent, not on one house.

It then:

1. classifies the rent as residential or commercial (mixed-use properties are split using the residential share you enter);
2. checks whether MRI applies to the residential rent;
3. computes MRI where it applies, with the average monthly figure and due date;
4. computes annual tax on the remaining rent after expenses and allowances;
5. subtracts the withholding tax credits, and never shows a negative bill: a credit or refund position is shown instead;
6. adds VAT on commercial rent if you are registered or your turnover passes the registration threshold, because residential rent is exempt from VAT;
7. lists the filing calendar, an optional penalty preview, and a figures for iTax panel in the order the forms ask for them.

Worked example

A resident individual lets one flat for KES 50,000 a month all year, so residential rent is KES 600,000, inside the MRI range. MRI is KES 45,000.00 for the year, about KES 45,000.00 in total payable, with no deduction for repairs or interest.

Which route applies to me?

The tool shows which route the law requires. Where MRI applies, the calculator also shows what the annual route would have cost, purely for comparison, and states clearly whether the law lets you choose. That election is held as a setting in the rates because the rule is one to confirm with a tax practitioner, and the answer is "no" unless the setting says otherwise.

Withholding tax and VAT

Some tenants, such as companies and government bodies, are required to withhold tax from the rent they pay, and send it to KRA. The amount withheld is a credit against your tax. Enter it per property so it is deducted. For commercial rent, VAT at the standard rate is charged on top of the rent if you are VAT registered, and you must register once your VAT-taxable turnover passes the threshold, currently KES 5,000,000 a year.

Allowable expenses

Under the annual route you can deduct expenses incurred wholly and exclusively to earn the rent: repairs and maintenance, land rates, ground rent, agent or management commission, insurance, service charge you pay as landlord, security, utilities you pay and legal fees for letting. Mortgage interest is deductible within the rules. Keep invoices and receipts for every item.

Penalties and deadlines

Missing the 20th for MRI leads to a penalty and interest, and a late annual return leads to a penalty even if no tax is due. Use the penalty preview and the penalty calculator to see the cost.

Limits

Mixed-use expenses are split by the residential share you enter. Companies cannot use MRI. Non-residents are taxed under different rules and the calculator applies a simplified rate. This tool gives an estimate for information only, so have a tax practitioner confirm the regime for your case.

Guides, tools and templates for this topic

Read next: Monthly rental income tax or annual tax: which route is better for a landlord?, The 30 June tax deadline, How to file a Monthly Rental Income return

Related calculators: Withholding Tax on Rent Calculator, Capital Allowances and Wear and Tear Calculator, Capital Gains Tax Calculator

Excel templates: MRI versus annual rental tax comparison, Monthly rental income (MRI) tracker

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