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Taxation of Rental Income in Kenya

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Taxation of Rental Income in Kenya
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Taxation of Rental Income


Taxation of rental income is not a new tax in Kenya. Many landlords have been subjected to audits by KRA but mostly claim that they were not aware that this type of tax exists. However, this is not a defense since ignorance of law has no excuse. Finance Act 2015 introduced a new tax source which is known as residential rental income tax that took effect  from 1st January 2016. Residential rental income tax is charged from income which is accrued in or derived from Kenya for the use or occupation of residential property.

 

who should pay?


Residential rental income tax is payable by a resident person(individuals, partnerships and companies) whose income for use or occupation of residential property and which does not exceed ten million shillings during any year of income. The tax period of RRIT is a calendar month and tax is payable at the rate of ten percent of gross rental receipts of a taxable resident person.


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Tax payer responsibilities

 

  1. Declare the total residential rental income
  2. Keep proper books of accounts
  3. Notify the commissioner when the gross rent is expected to change as per the Ksh  limit
  4. Pay RRIT by the due date i.e by 20th of the month immediately following the month which the rent was received
  5. Note that no expenses or capital allowances is deducted when computing the residential income tax

 

Talk to us today to guide you on matters of residential rental income tax or file your tax returns on your behalf and become tax compliant today. It's easy to comply with the tax law than incur penalties and interest including legal fees while defending the claim.

 

get in touch with us: + 254 735 679 308 | 020 2400 366 | This e-mail address is being protected from spambots. You need JavaScript enabled to view it | www.laxiaafrica.com