{"id":10065,"date":"2024-05-21T10:26:57","date_gmt":"2024-05-21T10:26:57","guid":{"rendered":"https:\/\/property254.co.ke\/blogs\/?p=10065"},"modified":"2024-06-16T06:38:19","modified_gmt":"2024-06-16T06:38:19","slug":"ultimate-guide-to-monthly-residential-taxation-of-rental-income-in-kenya","status":"publish","type":"post","link":"https:\/\/property254.co.ke\/blogs\/ultimate-guide-to-monthly-residential-taxation-of-rental-income-in-kenya\/","title":{"rendered":"Ultimate Guide to Monthly Residential Taxation of Rental income in Kenya"},"content":{"rendered":"\n<p>Residential rental income, also known as Monthly Rental Income (MRI) refers to income derived from renting out residential properties for use or occupation.\u00a0This tax applies to individuals and corporates with residential property only.\u00a0Effective\u00a01st\u00a0January 2021, the Finance Act 2020\u00a0requires every resident landlord receiving rent income of between Kshs.\u00a0288,000\u00a0(Kshs. 24,000 per month)\u00a0and\u00a0Kshs. 15 million per annum are\u00a0<a href=\"https:\/\/www.kra.go.ke\/en\/media-center\/blog\/1008-what-you-need-to-know-about-taxation-on-rental-income\">obligated to file and pay for MRI<\/a>\u00a0at 10% of the gross rent received\u00a0either monthly, quarterly, semi-annually or annually. The return must still be filed monthly.\u00a0No expenses, losses or capital allowances are allowed for deduction from the gross rent at the time of filing the return. Therefore, a landlord earning gross rent of Ksh. 100,000 in a month will be required to pay <a href=\"https:\/\/property254.co.ke\/blogs\/ultimate-guide-to-rental-income-tax-in-kenya\/\" target=\"_blank\" rel=\"noopener\">rental income tax<\/a> at the rate of 10%, that is 10%*100,000=10,000.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-embed wp-block-embed-embed\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"crQDLDQLWV\"><a href=\"https:\/\/property254.co.ke\/blogs\/capital-gains-tax-on-real-estate\/\">Capital Gains Tax on Real Estate<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"&#8220;Capital Gains Tax on Real Estate&#8221; &#8212; Property254 by Tulia Real Estate\" src=\"https:\/\/property254.co.ke\/blogs\/capital-gains-tax-on-real-estate\/embed\/#?secret=2xJus05PGQ#?secret=crQDLDQLWV\" data-secret=\"crQDLDQLWV\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Taxpayers&nbsp;within this bracket&nbsp;who wish to remain in annual <a href=\"https:\/\/property254.co.ke\/blogs\/passive-income-ideas-through-rental-properties\/\" title=\"Passive Income Ideas Through Rental Properties in Kenya\" target=\"_blank\" rel=\"noopener\">rental income<\/a> tax regime&nbsp;may do so by requesting the Commissioner in writing.&nbsp;The MRI return is filed on&nbsp;<a href=\"https:\/\/itax.kra.go.ke\/KRA-Portal\/login.htm\">iTax<\/a>&nbsp;or&nbsp;using the new&nbsp;<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.kra.mservices\">KRA M-service App<\/a>&nbsp;, on or before the 20th&nbsp;day of the following month. For example, rent received in January is declared and tax paid on or before 20th&nbsp;February. Further, any month that the landlord does not receive any rent, he\/she is required to file a NIL return.&nbsp;You can pay via Mpesa by using KRA PIN number 572572 and the account Number been&nbsp;the Payment Registration Number&nbsp;quoted at the top right corner of the generated payslip.<\/p>\n\n\n\n<p>Landlords with rental income below Kshs. 288,000 or above Kshs. 15 million per&nbsp;year and non-residents&nbsp;shall&nbsp;file annual <a title=\"How To Survive the First Year of Rental Property Business in Kenya\" href=\"https:\/\/property254.co.ke\/blogs\/how-to-survive-the-first-year-of-rental-property-business-in-kenya\/\" target=\"_blank\" rel=\"noopener\">income tax returns and declare rental<\/a> income together with income from other sources.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-embed wp-block-embed-embed\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"t3unrPF4jb\"><a href=\"https:\/\/property254.co.ke\/blogs\/real-estate-taxes\/\">Best Guide to Real Estate Taxation in Kenya<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"&#8220;Best Guide to Real Estate Taxation in Kenya&#8221; &#8212; Property254 by Tulia Real Estate\" src=\"https:\/\/property254.co.ke\/blogs\/real-estate-taxes\/embed\/#?secret=m0Z0zT0zZt#?secret=t3unrPF4jb\" data-secret=\"t3unrPF4jb\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Residential&nbsp;<a href=\"https:\/\/www.kra.go.ke\/en\/media-center\/blog\/1008-what-you-need-to-know-about-taxation-on-rental-income\">rental income<\/a>&nbsp;is final tax. This means that, any income from rent that is subject to residential rental income tax is not liable to any other tax under the Act and therefore, persons are not required to declare the same in their annual income tax returns.<\/p>\n\n\n\n<p>Late filing of MRI returns attracts a penalty of&nbsp;2,000 or 5% of the tax due whichever is higher for individuals&nbsp;and&nbsp;20,000 or 5% of the tax due whichever is higher for corporates&nbsp;and subsequent interest of 1% per month on the unpaid tax until payment is made in full.<\/p>\n\n\n\n<p>Penalty on late payment:&nbsp;5% of the tax due and&nbsp;late payment interest of 1% per month on the unpaid tax until the tax is paid in full.<\/p>\n\n\n\n<p>As&nbsp;you engage in <a href=\"https:\/\/property254.co.ke\/blogs\/how-to-make-guaranteed-income-per-month-through-real-estate\/\" title=\"How to Make Guaranteed 30K per month from 3M through real estate in Kenya\" target=\"_blank\" rel=\"noopener\">real estate<\/a>, its always important to consider the impact of taxes on your transactions. To remain compliant, please consult your tax or legal expert.&nbsp;For more information, please call David Ndiritu on&nbsp;+254 721 949 580&nbsp;or via email on&nbsp;<a href=\"mailto:dndiritu@hisibaticonsuting.com\">dndiritu@hisibaticonsuting.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Residential rental income, also known as Monthly Rental Income (MRI) refers to income derived from renting out residential properties for use or occupation.\u00a0This tax applies to individuals and corporates with residential property only.\u00a0Effective\u00a01st\u00a0January 2021, the Finance Act 2020\u00a0requires every resident landlord receiving rent income of between Kshs.\u00a0288,000\u00a0(Kshs. 24,000 per month)\u00a0and\u00a0Kshs. 15 million per annum are\u00a0obligated [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":13116,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":["post-10065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tips-advice"],"_links":{"self":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/10065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/comments?post=10065"}],"version-history":[{"count":8,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/10065\/revisions"}],"predecessor-version":[{"id":13370,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/10065\/revisions\/13370"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/media\/13116"}],"wp:attachment":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/media?parent=10065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/categories?post=10065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/tags?post=10065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}