Tax on Rental Income in Kenya. This is The Amount you Will Pay if You are a Landlord

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Withholding Tax on Rental Income

If you have houses in Kenya where you collect rent, you are required to pay tax on rent, whether it comes from apartments or family houses

A notice from KRA reads:

Kenya Revenue Authority wishes to notify landlords and tenants that the government through the Finance Act 2016, introduced a withholding tax of 10% on gross rent payable to landlords, effective from 1st January 2017.

This is meant to facilitate collection of tax on rental income by appointing agents and/or tenants who occupy both commercial and residential premises. The appointed agents shall withhold the tax and remit to Kenya Revenue Authority via iTax by the 20th day of the following month.

The appointed agents are notified through their official email address about their obligations under the law. No person shall withhold any tax unless appointed in writing by the Commissioner as a withholding agent.

 

This means that if you are earning Ksh 1 million from rent, you are supposed to pay Ksh 100,000 in tax. This regulation was passed so as increase tax collected by KRA.

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