Introduction

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Accounting & Auditing

Residential rental income, also known as Monthly Rental Income (MRI) refers to income derived from renting out residential properties for use or occupation. This tax applies to individuals and corporates with residential property. This is a tax payable by a resident person on rental income accrued or derived in Kenya for the use or occupation of residential property which is more than Kshs. 288,000 but does not exceed Kshs. 15M during any year of income. It is taxed at the rate of 7.5% on the gross amount received per month. The 7.5% is a drop from the previous 10% which came into effect in January 2024. MRI is not applicable on rent on commercial property, non-resident landlords, and landlords who earn more than KShs.15M per year. The qualifying landlords are therefore required to register for MRI obligation. This is a final tax.