How to File KRA Rental Income Tax in Kenya: Step-by-Step Guide for 2026

Tax season hits different when you're a landlord.

You've got M-Pesa statements everywhere. A notebook with scribbled rent amounts. And that nagging feeling that KRA is watching.

Here's the thing: filing rental income tax in Kenya isn't as scary as it looks. Once you understand the system, it's actually straightforward.

Let me walk you through it.

Table of Contents

• What is Rental Income Tax in Kenya?
• MRI Tax Rates for 2026
• Who Must File MRI Tax?
• How to Register for MRI Tax on iTax
• Step-by-Step: Filing Your Monthly MRI Return
• Common Mistakes Landlords Make
• Penalties for Late Filing or Payment
• Can You Deduct Expenses?
• Keeping Records for KRA
• Using Software to Simplify MRI Filing
• Key Deadlines to Remember
• What If You're Below the Threshold?
• Next Steps

What is Rental Income Tax in Kenya?

If you earn rent from property in Kenya, KRA wants their cut. Simple as that.

The tax is called Monthly Rental Income (MRI) tax. It applies to:

• Residential properties
• Commercial properties
• Land leased for rent

Doesn't matter if you own one bedsitter in Pipeline or 50 apartments in Kilimani. If tenants pay you rent, you owe tax.

MRI Tax Rates for 2026

Kenya uses a simplified tax system for rental income. Here's how it breaks down:

Wait, what? If you collect less than KES 288,000 per month, you pay nothing?

Correct. That's the threshold. But you still need to file. More on that later.

For landlords above the threshold, it's 7.5% of your gross rental income. No deductions. No complicated calculations. Just multiply your total rent by 0.075.

Example:

• Monthly rent collected: KES 400,000
• Tax due: KES 400,000 × 7.5% = KES 30,000

Who Must File MRI Tax?

Every landlord earning rental income in Kenya must:

1. Register for MRI tax with KRA
2. File monthly returns (even if below threshold)
3. Pay any tax due by the 20th of the following month

Yes, even if you're below KES 288,000. You file a nil return.

Skip this, and penalties start stacking. We'll cover those later.

How to Register for MRI Tax on iTax

Before you can file, you need to register for the MRI tax obligation. Here's how:

Step 1: Log into iTax Go to itax.kra.go.ke and sign in with your KRA PIN and password.

Step 2: Navigate to Registration Click on "Registration" → "Amend PIN Details"

Step 3: Add MRI Obligation Under "Tax Obligations," find and tick "Rental Income Tax (MRI)"

Step 4: Enter Property Details Add your property information:

• Property location (county, sub-county)
• Type (residential/commercial)
• Number of units

Step 5: Submit Review and submit. KRA processes most applications within 24-48 hours.

Once approved, you'll see MRI under your tax obligations in iTax.

Step-by-Step: Filing Your Monthly MRI Return

Here's the actual filing process. Do this every month.

Step 1: Gather Your Numbers

Before logging in, know these figures:

• Total rent invoiced for the month
• Total rent actually received
• Number of occupied units

Pro tip: If you use property management software, you can generate this in seconds.

Step 2: Log into iTax

Go to iTax and sign in.

Step 3: Navigate to MRI Returns

Click "Returns" → "File Returns" → Select "Rental Income Tax"

Step 4: Select the Tax Period

Choose the month you're filing for. Example: If you're filing in May for April's rent, select April 2026.

Step 5: Enter Income Details

Fill in:

• Gross rental income received
• Number of rental units
• Occupancy status

Step 6: Review the Calculation

iTax automatically calculates your tax:

• If below KES 288,000: Shows KES 0
• If above: Shows 7.5% of gross rent

Step 7: Submit the Return

Click submit. You'll get an acknowledgment receipt. Save this.

Step 8: Pay the Tax (if applicable)

If you owe tax, generate a payment slip and pay via:

• M-Pesa (Paybill 572572)
• Bank transfer
• KRA agent

Deadline: 20th of the following month.

Common Mistakes Landlords Make

I've seen these too many times:

1. Not filing nil returns Below the threshold doesn't mean you skip filing. File every month, even if tax is zero.

2. Using wrong income figures Report rent received, not rent invoiced. If a tenant didn't pay, don't include that amount.

3. Missing deadlines The 20th sneaks up fast. Set a phone reminder.

4. Not keeping records KRA can audit you. Keep receipts, M-Pesa statements, and bank records for 5 years.

5. Mixing personal and rental income MRI is only for rental income. Your salary is taxed separately under PAYE.

Penalties for Late Filing or Payment

Miss the deadline? Here's what you're looking at:

These add up fast. A KES 30,000 tax bill can balloon to KES 50,000+ with penalties.

Not worth it.

Can You Deduct Expenses?

Here's where MRI differs from other tax systems.

Under MRI, you cannot deduct:

• Mortgage interest
• Repairs and maintenance
• Property management fees
• Insurance
• Agent commissions

The 7.5% rate is applied to gross rent. No deductions allowed.

However, if your allowable expenses exceed 20% of rental income, you might benefit from opting for the standard income tax system instead. Talk to a tax advisor if you think this applies to you.

Keeping Records for KRA

What should you keep?

• Rent receipts or payment confirmations
• M-Pesa statements showing rent payments
• Bank statements with rent deposits
• Tenancy agreements for each unit
• Property documents (title deed, sale agreement)

Keep everything for at least 5 years. Digital copies are fine — just make sure they're backed up.

Using Software to Simplify MRI Filing

Manually tracking rent is a nightmare. You're cross-referencing M-Pesa messages, bank statements, and handwritten notebooks.

There's a better way.

KodiSawa automatically tracks all your rent payments and generates KRA-ready reports. When tax time comes, you export your numbers and file in minutes.

No more:

• Scrolling through hundreds of M-Pesa messages
• Manual calculations
• Missed payments slipping through cracks

The system matches payments to tenants automatically. Your monthly MRI figures are always ready.

Key Deadlines to Remember

Mark these on your calendar:

Set recurring reminders. Seriously.

What If You're Below the Threshold?

Earning less than KES 288,000/month in rent?

You still need to:

1. Register for MRI tax
2. File monthly nil returns
3. Keep records

You don't pay tax, but you must file. This keeps you compliant and avoids penalties.

Next Steps

Here's your action plan:

1. Check your iTax account — Is MRI registered as an obligation?
2. Calculate last month's rent — What was your total collected?
3. File your return — Do it now, don't wait for the deadline
4. Set up a system — Manual tracking or software that does it for you

Tax compliance isn't optional. But it doesn't have to be painful.

Get your records in order, file on time, and KRA becomes a non-issue.

Need help tracking rent payments and generating KRA reports? Try KodiSawa free for 14 days — your rental income tax filing just got easier.