Kenyans living outside the country but earning rental income from properties in Kenya have been urged to review their tax obligations following changes introduced under the Finance Act 2026.
The Kenya Revenue Authority (KRA) said on Friday, September 25, that non-resident landlords receiving rental income from Kenyan properties are required to comply with a new simplified tax framework.
The new system took effect on July 1, 2026, and requires non-resident property owners to pay tax equivalent to 30 per cent of their gross rental income before any expenses are deducted.
"You own a rental property in Kenya but live abroad? Under the Finance Act 2026, there is now a simplified tax framework for non-residents earning rental income from Kenyan property," KRA noted.
For example, a Kenyan living abroad who collects Ksh100,000 in monthly rent would be required to pay Ksh30,000 in tax, leaving Ksh70,000 after the tax has been deducted.
KRA advised affected property owners to ensure their rental income is properly registered with the authority and that all applicable taxes are declared and paid.
Under the new requirements, the tax must be paid by the 20th day of the month following the month in which the rental income was received, unless the tax is being withheld by a resident agent on behalf of the property owner.
The taxman also clarified the responsibilities of relatives, agents and property managers who oversee properties on behalf of non-resident landlords. Such individuals may be required to deduct and remit the applicable tax to KRA.
"Do you have someone managing the property for you, for example, a relative, agent, or property manager? They may now be required to withhold and remit tax on your behalf," the taxman said.
The 30 per cent rate applies specifically to landlords who reside outside Kenya. Property owners who are residents in Kenya generally pay tax at a rate of 7.5 per cent of their gross residential rental income.
The changes form part of the wider tax measures introduced under the Finance Act 2026, with KRA seeking to streamline tax compliance among non-residents earning income from properties located in Kenya.
The law further provides that late payment attracts a penalty equivalent to 5 per cent of the unpaid tax, alongside 1 per cent monthly interest until the outstanding amount is settled in full.
