Filing for Rental Income Tax Returns and Payments in Kenya

When filing for rental income tax returns and payments in Kenya you first need to compile your gross rent income from all properties and file your returns online via iTax. The residential rental tax will be a final tax and will be paid on monthly basis using a simplified online payment return. Eligible landlords shall not be required to file annual returns unless one has other incomes e.g. commercial rent, employment income, business income, farm income and others.

The Return must be filed online via iTax as follows;

1. Log on to iTax.kra.go.ke
2. Download the residential rental income tax return form (NB: the return can also be completed online or offline).
3. Fill-in the required details in the return.
4. Upload the completed return/form and submit.
5. Generate the electronic payment slip to use in paying the tax at any KRA appointed bank or via Mpesa/Airtel.
6. To pay via Mpesa/Airtel, select payment option of ‘cash’ while generating the payment slip.
7. To pay via Mpesa;

• Use the KRA Pay Bill Number 572572 and the Account Number is the Payment Registration Number quoted at the top right corner of the generated Payment Slip.

1. To pay via Airtel;

• Dial KRA USSD code *572# to access the menu and select the E-slip generation self-service menu. Proceed to make payment using the E-slip number.

These are some of the exceptions to the Residential Rental Income Tax regime;

This tax regime will not apply to;

1. Rental income from commercial property.
2. Where a person who would otherwise pay tax under this regime elects by notice in writing to the Commissioner NOT to be subjected to the Residential Rental Income Tax.
3. Non- residents (as per Income Tax Act definition) landlords.
4. Landlords earning residential rental income of more than Ksh. 10 million per year.

What are some of the Benefits of the Residential Rental Income Tax?

1. Simplified tax computation at 10% flat rate on gross rent instead of the 10% -30% rates in the current regime.
2. Landlords shall not be required to produce records to account for expenses.
3. This will be a final tax thus landlords will not be required to file annual returns if they do not have other incomes
4. Compliance will be easy and cost effective.

Article by Juma Fred.