KRA Rental Tax Exemption Threshold in Kenya 2026: Who Is Exempt?
Landlords in Kenya earning less than KSh 288,000 annually from residential rental property are exempt from Monthly Rental Income (MRI) tax, according to information reported from the Kenya Revenue Authority (KRA) in October 2026.
The threshold is equivalent to approximately KSh 24,000 per month. The clarification is important for small-scale landlords who rent out single rooms, bedsitters, apartments or residential houses and want to understand whether they must pay monthly rental income tax.
However, the exemption applies to the MRI tax regime. Landlords should consider their overall tax obligations and confirm the applicable rules with KRA, particularly where they earn income from other sources or own commercial property.
What Is the KRA Rental Tax Exemption Threshold in 2026?
The residential rental income threshold is KSh 288,000 per year. A resident landlord whose qualifying gross residential rental income is below this amount falls outside the standard MRI tax regime.
- Annual threshold: KSh 288,000.
- Monthly equivalent: KSh 24,000.
- Rental income below the threshold: Exempt from MRI tax under the stated threshold rules.
- Rental income above the threshold: May fall under MRI tax, subject to the applicable eligibility conditions.
- Rental income above KSh 15 million annually: Generally falls under the ordinary income tax framework rather than the standard MRI regime.
The monthly figure of KSh 24,000 is a simple annual average. The applicable threshold is assessed using rental income over the relevant year, so landlords should not assume that one month’s rent alone determines their annual tax position.
Examples of Landlords Below the KRA Rental Tax Threshold
The following examples illustrate how the annual threshold works for residential rental income.
| Monthly rent | Annual rental income | MRI tax position |
|---|---|---|
| KSh 8,000 | KSh 96,000 | Below the threshold |
| KSh 15,000 | KSh 180,000 | Below the threshold |
| KSh 20,000 | KSh 240,000 | Below the threshold |
| KSh 25,000 | KSh 300,000 | Above the threshold |
| KSh 50,000 | KSh 600,000 | Within the usual MRI income range |
These examples assume the stated rent is the landlord’s total qualifying residential rental income and remains consistent throughout the year. Where a landlord owns several properties, the combined relevant rental income should be considered rather than assessing each unit in isolation.
Do Landlords Paying Less Than KSh 24,000 Rent Per Month Need to Pay KRA?
A resident landlord whose total qualifying residential rental income remains below KSh 288,000 annually is outside the standard MRI tax threshold.
For example, a landlord collecting KSh 18,000 monthly from residential tenants would receive KSh 216,000 in a full year if the rent remained unchanged. This amount is below the stated annual threshold.
However, the landlord should confirm whether any other tax obligations apply to their circumstances. The MRI exemption should not automatically be interpreted as an exemption from every tax or every filing obligation.
What Happens If Rental Income Exceeds KSh 288,000?
Where qualifying residential rental income exceeds KSh 288,000 annually, the landlord may become subject to MRI tax if the other eligibility conditions are met.
The standard MRI regime generally covers annual residential rental income above KSh 288,000 and not exceeding KSh 15 million. Rental income above the upper limit is generally dealt with under the ordinary income tax framework.
Landlords should confirm the applicable tax rate and filing requirements on the official KRA website or through their iTax account before calculating or paying tax. KRA’s online guidance has displayed differing rates and thresholds, making it important to check the current rules applicable to the relevant tax period.
Does the Exemption Apply to Commercial Rental Property?
The standard MRI regime is designed for qualifying residential rental income. Commercial property income, including rent from shops, offices and warehouses, is generally handled under a different tax framework.
Landlords earning commercial rent should therefore not assume that the residential MRI exemption automatically removes their tax obligations. The appropriate treatment depends on the nature of the property, the landlord’s tax status and the applicable income tax rules.
What About Landlords Earning More Than KSh 15 Million?
Residential landlords whose annual rental income exceeds KSh 15 million generally fall outside the standard MRI regime and must account for rental income under the applicable ordinary income tax rules.
Under the ordinary regime, the computation may differ from MRI because the taxpayer’s allowable deductions and other circumstances can be relevant. Landlords with larger property portfolios should obtain current KRA guidance or professional tax advice before filing their returns.
How Can Landlords Confirm Their Rental Tax Status?
- Calculate the total gross rent received from the relevant residential properties during the year.
- Compare the total with the KSh 288,000 annual threshold.
- Identify whether the property is residential or commercial.
- Check the current rental income tax guidance published by KRA.
- Use the official iTax platform to review relevant tax obligations and filing instructions.
- Keep rental records, tenancy agreements and payment information in case they are needed to confirm the correct tax treatment.
Official KRA resources:
Frequently Asked Questions
What is the KRA rental tax exemption threshold in Kenya in 2026?
The stated threshold for the standard residential Monthly Rental Income tax regime is KSh 288,000 annually, equivalent to KSh 24,000 per month on average.
Is rental income of KSh 20,000 per month taxable under MRI?
If this is the landlord’s total qualifying residential rental income for a full year, it amounts to KSh 240,000, which is below the stated KSh 288,000 annual threshold.
What if I own several rental houses?
Consider the total relevant rental income from your properties when determining your tax position. Do not assume that every property has a separate KSh 288,000 exemption.
Is commercial rent covered by the MRI exemption?
Commercial rental income is generally handled under a different tax framework from residential MRI. Confirm the applicable rules with KRA.
When should landlords file and pay MRI tax?
For landlords who fall within the applicable MRI regime, KRA guidance generally provides for monthly filing and payment by the 20th day of the following month. Confirm the current filing instructions on iTax.
Conclusion
The KRA residential rental tax exemption threshold in Kenya is KSh 288,000 annually, or approximately KSh 24,000 per month. Resident landlords whose qualifying residential rental income remains below this threshold are generally exempt from the standard MRI tax regime.
Landlords earning above the threshold should confirm whether they qualify for MRI or must use the ordinary income tax regime. Because KRA’s published online information may differ across pages, verify the applicable rate, income limits and filing requirements directly with the authority before making a tax decision.