KRA Sets 30% Tax on Rental Income Earned by Landlords Living Abroad

Kenya has introduced a 30 per cent tax on gross rental income earned by non-resident landlords from property in the country under the Finance Act 2026.

The Kenya Revenue Authority (KRA) confirmed on 25 September that individuals living outside Kenya and receiving rental income from Kenyan property must pay tax at 30 per cent of their gross rental income. The tax is charged before any expenses are deducted.

Resident landlords, by comparison, continue to pay a 7.5 per cent tax on gross rental income. The different rates place a substantially higher tax burden on landlords who live outside Kenya.

Under the new rules, tax must be paid by the 20th day of the month following the month in which the rent is received. This does not apply where a local agent is already withholding and remitting the tax on behalf of the non-resident landlord.

KRA has also clarified that relatives, property managers and other agents may be 

required to deduct the tax and pay it to the authority. The provision extends responsibility for compliance to people managing rental properties on behalf of landlords living abroad.

For example, a non-resident landlord receiving Ksh100,000 in monthly rent would have Ksh30,000 payable in tax, leaving Ksh70,000 after the tax obligation. Failure to pay the tax on time attracts a penalty of 5 per cent of the unpaid amount, as well as interest of 1 per cent per month until the outstanding liability is settled.

The changes form part of Kenya's broader efforts to expand the tax base and improve the collection of rental income tax. Rental properties owned by non-residents can be difficult to monitor because they are often managed by relatives or agents in Kenya.

The new framework is intended to simplify the collection of tax from non-resident landlords while strengthening enforcement. It also places greater responsibility on local representatives who manage properties and receive or handle rental payments.

The higher rate is likely to affect Kenyans living abroad who own rental property in the country. The increased tax liability could reduce their net rental income and may influence decisions about future investment in Kenyan property.

The Finance Act 2026 therefore establishes a significantly different tax treatment for rental income based on whether the landlord is resident in Kenya. Non-resident landlords face a 30 per cent levy on gross rental income, while resident landlords remain subject to the 7.5 per cent rate.