🏠 Government & Compliance

File Rental Income Tax (MRI) in Kenya the Right Way (2026)

The pain: Landlords get the rate, the threshold and the deadline wrong — then pay penalties or over-pay tax.

The outcome: A correctly filed MRI return and paid PRN, every month, with no penalties — and the right structure so you never over-pay.

Residential rent: 7.5% of GROSS rent (final tax, no expense deductions). File and pay by the 20th of the following month.

Do it with LeadAfrik — free

KRA Tax Calculator →

Work out your 7.5% MRI on this month's gross rent in seconds — and PAYE, VAT and rental in one place.

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The key facts

It is 7.5% of GROSS rent — you cannot deduct expenses or mortgage interest.
Monthly deadline: on or before the 20th of the next month (January rent → by 20 February).
File a NIL MRI return for months with no rent once you are registered for the obligation.
Below ~KSh 288,000/year the tax doesn't apply; above KSh 15,000,000/year you declare under annual income tax instead.
Commercial rent is NOT under MRI — it uses normal income tax with VAT considerations.

How to file and pay

1iTax → Returns → File Return → obligation “Income Tax – Rental Income.”
2Enter gross rent for the month; the system computes 7.5% automatically; submit.
3Payments → generate a Payment Registration Number (PRN), tax head “Income Tax – Rent.”
4Pay via M-Pesa (Paybill 222222, account = your PRN) or bank.

⚠️ KRA's page has shown the lower threshold as “exceeding 280,000” while the statutory figure is KSh 288,000/year (KSh 24,000/month). Confirm the current threshold on iTax.

Common mistakes to avoid

Deducting expenses from rent — MRI is 7.5% of GROSS.
Missing the monthly 20th deadline (people confuse it with the 30 June annual date).
Not filing NIL MRI for vacant months once registered.
Filing the return but forgetting to generate the PRN and actually pay.

Ready to act? Use these free tools

KRA Tax Calculator →

Work out your 7.5% MRI on this month's gross rent in seconds — and PAYE, VAT and rental in one place.

Invoice / Rent Receipt Generator →

Issue clean rent invoices and receipts to your tenants — branded, PDF, free.

Ask Mjuzi (free AI) →

Tax, rent and compliance questions answered in plain English — free.

Questions people ask

Can I deduct repairs or mortgage interest from rental income tax?

No. Monthly Rental Income tax is 7.5% of gross rent as a final tax — no expenses or interest are deductible. If you want to deduct expenses you would have to elect out into the normal income-tax regime, which only makes sense above the MRI band.

What happens in a month with no rent?

Once you are registered for the rental obligation, file a NIL MRI return for that month. Skipping it can attract a penalty even though no tax was due.

Keep it current: Fees, thresholds and deadlines change. Re-confirm the current figure on the official KRA portal (itax.kra.go.ke) before you file or pay.

Official sources