Monthly Rental Income (MRI) is a simplified final tax regime applicable to rental income earned from residential property in Kenya.

It was introduced under the Finance Act, 2015 and came into effect on 1st January 2016 through Section 6A of the Income Tax Act (Cap. 470).

MRI applies only to residential rental income and is designed to simplify compliance for landlords.

MRI is payable by a resident person (individual, partnership, or company) earning income from residential rental property in Kenya.

• Applies to landlords earning between KES 288,000 and KES 15 million per year from residential rental income.

• Landlords earning above KES 15 million per year must declare rental income under the normal annual income tax regime.

• Eligible landlords may opt out of MRI and instead file under the normal annual income tax regime, if they so choose.

MRI is charged at a flat rate of 7.5% of the gross rent received.

MRI does not apply to:

• Commercial rental property income

  Declared under the normal annual income tax return.

• Non-resident landlords

  Rental income is subject to withholding tax at 30% of gross rent.

• Landlords earning above KES 15 million annually from residential rental income.

• Landlords earning below KES 24,000 per month (KES 288,000 per year) from residential rental income.