Property Tax in Kenya: A Complete 2026 Guide for Landlords and Investors

Property ownership in Kenya comes with several distinct tax obligations — some paid once at purchase, others recurring annually, and others triggered only when you sell. With the Finance Act, 2026 introducing fresh changes to rental income tax and landlord registration, understanding exactly what you owe, when, and to whom has never been more important.

This guide breaks down every major property tax in Kenya, current rates, and where the money goes, with links to the primary sources used throughout.

1. Stamp Duty (Paid at Purchase)

Stamp duty is charged when property ownership is transferred and must be paid before the Lands Registry will register the transaction. It is generally the buyer's responsibility unless otherwise agreed.

• Urban properties (cities, municipalities, and gazetted towns): 4% of the property's assessed value.
• Rural properties: 2% of the property's assessed value.
• Lease registrations: 1% of annual rent for leases of three years or less, and 2% of annual rent for leases longer than three years.

Since February 2026, stamp duty is assessed and paid entirely online through the Ardhipay module on the Ardhisasa platform, with payment options including M-Pesa and bank RTGS via eCitizen.

2. Land Rates (County Government)

Land rates are an annual charge levied by county governments on rateable property, based on the Unimproved Site Value (USV) — essentially the value of the land alone, excluding buildings and other improvements. In Nairobi, the standard 2026 rate is approximately 0.115% of USV per year, though rates vary by county and zoning classification. Land rates fund county services and must be settled to obtain a clearance certificate, which is typically required before selling or transferring property.

3. Land Rent / Ground Rent (National Government)

Land rent, sometimes called ground rent, is a separate annual payment made to the national government through the Ministry of Lands and Physical Planning. It applies specifically to leasehold property owners and is generally due by the end of January each year. Rates typically range from KES 1,000 to KES 10,000 per acre annually, depending on location and land use, and payments are made through the Ardhisasa platform. Late payment attracts interest of around 1% per month.

4. Rental Income Tax

Rental income in Kenya is taxed differently depending on whether the property is residential or commercial, and on the landlord's total annual rental earnings.

Monthly Rental Income (MRI) Tax — Residential Property

The MRI regime is a simplified tax that applies to Kenyan resident landlords earning gross annual rental income between KES 288,000 and KES 15 million. Under the Finance Act, 2026, which took effect on 1 July 2026, the MRI rate increased from 7.5% to 10% of gross rental income. It is a final tax — no expenses, losses, or capital allowances can be deducted, but no further income tax is owed on that rental income. Returns must be filed monthly, even though payment can be made monthly, quarterly, semi-annually, or annually.

Rental Income Above KES 15 Million

Landlords earning more than KES 15 million a year in residential rental income must declare it in their annual income tax return, where it is taxed at the graduated individual rate (up to 35%) or the corporate rate (30%), with allowable deductions for legitimate expenses such as repairs, insurance, and management fees.

Commercial Rental Income

Commercial rent must be fully disclosed under the standard income tax return and is taxed at ordinary individual or corporate rates rather than the simplified MRI regime. Commercial landlords earning KES 5 million or more per year in rent are also required to register for VAT and charge it at 16%.

Non-Resident Landlords

The Finance Act, 2026 also introduced a distinct framework for non-resident landlords: tenants or agents paying rent to a non-resident person for Kenyan property must withhold tax at 30% of gross rent. Kenya's tax treaties with several countries — including the UK, Canada, France, Germany, Mauritius, the UAE, and South Africa — may cap this rate lower, but diaspora landlords must apply for treaty relief with supporting documentation to benefit.

5. Capital Gains Tax (CGT)

Capital Gains Tax applies when you sell or transfer property in Kenya and is the seller's responsibility. The current CGT rate is 15% of the net gain — the transfer value minus the adjusted cost of the property, which includes the original purchase price plus allowable incidental costs such as legal fees, stamp duty paid on acquisition, and documented improvements. CGT is a final tax and must be paid, or an exemption confirmed, before the Lands Registrar will register the transfer.

6. Withholding Tax on Rent (Agents and Property Managers)

Where rent is collected through an appointed tax agent, withholding tax obligations may apply on top of the landlord's own rental income tax filings. Both landlords and the agents or property managers who collect rent on their behalf should confirm their specific obligations, as enforcement in this area has tightened under recent Finance Act changes and expanded use of the eTIMS system.

Putting It All Together: A Landlord's Tax Checklist

• Pay stamp duty once, at the point of purchase or lease registration.
• Pay land rates annually to your county government.
• Pay land rent annually to the national government if your property is leasehold.
• File and pay Monthly Rental Income Tax (10% of gross rent) every month if you're a resident landlord under the simplified regime.
• Move to graduated or corporate income tax rates if annual rental income exceeds KES 15 million.
• Register for VAT if commercial rental income exceeds KES 5 million a year.
• Understand withholding tax obligations if you're a non-resident landlord or use a collection agent.
• Budget for Capital Gains Tax (15% of net gain) whenever you eventually sell.

How Mkodisha Helps Landlords Stay Compliant

Staying on top of monthly filing deadlines and gross rent calculations is far easier with accurate, automated records. Mkodisha gives landlords a complete digital log of every rent payment received, making it simple to calculate gross rental income, track payment history by unit and tenant, and pull the figures you need when filing your Monthly Rental Income Tax return.

Create a landlord account to start tracking your rental income digitally, or visit our blog for more guides on managing property in Kenya. For questions specific to your portfolio, contact us — though for formal tax advice, always confirm your position with KRA or a licensed tax professional.

Sources and Further Reading

• Kenya Revenue Authority — Payment of Rental Income Tax
• Kenya Revenue Authority — What You Need to Know About Taxation on Rental Income
• Kenya Revenue Authority — More About Rental Income Tax (FAQs)
• PwC Tax Summaries — Kenya: Individual Taxes on Personal Income
• The Weekly Vision — New Tax Rules Take Effect as KRA Targets Additional Revenue (Finance Act 2026)
• Huduma Global — Kenya Rental Income Tax 2026: New 10% Rate Explained
• Huduma Global — Understanding Stamp Duty, Capital Gains Tax, and Other Property Transaction Taxes in Kenya
• Global Law Experts — Capital Gains Tax Impact on Property Transfers in Kenya (2026)
• Global Law Experts — Residential Rental Income Rules in Kenya (2026)
• VAAL Real Estate — Property Taxes Every Kenyan Landlord Must Pay in 2026
• Afriqahome — Kenya Stamp Duty 2026: Rates and All Closing Costs
• Afriqahome — Kenya Stamp Duty Calculator
• Afriqahome — Land Rates and Ground Rent in Kenya: How to Check and Pay (2026)

This article is for general informational purposes only and does not constitute tax or legal advice. Tax rules and rates change frequently — always verify your specific obligations with the Kenya Revenue Authority or a licensed tax advisor before making decisions.