Guide - Non-Resident Tax
Non-Resident Rental Income Tax Kenya Guide 2026
If you're a non-resident earning rental income from property in Kenya — or you're a local property manager, agent, or tenant paying rent to one — the Finance Act 2026 introduced a dedicated tax regime you need to know about. This guide explains who it applies to, how registration and filing works, and what happens if you get it wrong.
What Changed in the Finance Act 2026
Before this Act, non-resident landlords were taxed on Kenyan rental income through the general withholding tax mechanism under Section 35 of the Income Tax Act — the payer withheld tax and remitted it, but there was no dedicated, simplified system for the non-resident to register and self-declare.
The Finance Act 2026 formalizes this into its own regime: non-resident rental income tax, a final withholding tax of:
- 30% on gross rent from immovable property (land, buildings, apartments, commercial units)
- 15% on rent from movable property
It's a final tax on gross rent — no deductions for expenses, mortgage interest, agent fees, or maintenance costs. This is the same “no deductions” structure used elsewhere in Kenyan withholding tax law, so if you're used to netting expenses off rental income as a resident landlord, this is a different regime entirely.
Effective date: 1 July 2026.
Who This Applies To
- Any non-resident individual or company earning rental income from Kenyan-situated property, regardless of how the tenancy was arranged
- Applies whether the tenant is an individual, a company, or a government entity
- Applies even if the non-resident uses a local agent or property manager to handle the letting
It does not replace VAT obligations on commercial lettings — if the property is also subject to VAT (e.g. certain commercial leases), that's a separate compliance track. This guide covers the income tax side only.
How Registration and Filing Works
The Finance Act 2026 inserted a new Section 6B into the Income Tax Act, creating a dedicated non-resident rental income tax regime. Here's the mechanism and — more importantly — why it exists.
Why this changed: Before Section 6B, the law relied on tenants to withhold tax at source when their landlord was non-resident (under Section 35). In practice this was hard to enforce — a tenant often has no reliable way to know whether their landlord is Kenyan-resident or not. Section 6B shifts that burden away from the tenant and onto the landlord directly: non-residents now register and self-declare their own rental income, rather than relying on the tenant to work it out and withhold.
In outline:
- Register under a simplified framework for non-resident taxpayers (via iTax's non-resident income tax category — see note below).
- File a monthly return declaring gross rent received for that month.
- Pay the tax due by the 20th day of the following month — the same monthly deadline pattern used across most Kenyan withholding and rental taxes.
This is not the same system residents use. Resident landlords under the Monthly Rental Income (MRI) regime register through eRITS (Electronic Rental Income Tax System). eRITS applies only to residents earning between KES 288,000 and KES 15 million annually — it is not the system non-resident landlords use. Non-residents file through iTax directly under the non-resident income tax return category. If you're a foreign landlord and someone tells you to use eRITS, that's incorrect.
The exception that matters: if a resident agent or property manager is already appointed to withhold tax on your rent under Section 35(3)(j) — the older mechanism — you do not also self-declare under Section 6B. The regime is designed to avoid double compliance: it's either the resident withholding agent handling it, or the non-resident self-declaring directly, not both. If you're unsure which situation applies to you, that's the first thing to establish before you file anything.
Operational note: Because this regime only took effect 1 July 2026, the exact iTax screen flow for registration is new and may still be settling. The legal obligation and the 30%/15% rates are firmly in force regardless of how smooth the portal experience is on any given day.
If You're a Local Agent or Property Manager
If you manage property on behalf of a non-resident landlord, you may be treated as a withholding point in the chain, similar in spirit to how withholding VAT agents work for VAT:
Confirm your withholding role
Confirm whether your principal is treated as self-declaring or whether you're expected to withhold and remit on their behalf.
Keep gross-rent records
Keep records of gross rent collected, remitted amounts, and any certificates issued.
Don't assume VAT-agent status covers this
Your existing VAT-agent status does not cover this — non-resident rental income tax is a separate income tax regime, not a VAT mechanism.
Common Mistakes
Assuming this only affects big commercial landlords
It applies to any non-resident earning any rental income from Kenyan property — including someone who inherited a single apartment and lives abroad.
Deducting expenses before calculating the tax
This is a tax on gross rent. Mortgage interest, repairs, agent commission — none of it reduces the taxable amount.
Confusing it with resident rental income tax
Resident landlords have their own (different) rental income tax regime. This guide is specifically about non-residents.
Missing the 20th-of-month deadline
Like most Kenyan withholding taxes, late payment attracts penalties and interest — treat it with the same discipline as a VAT filing deadline.
Self-declaring when a resident agent already withholds for you
If your property manager or agent already withholds tax on your rent under Section 35(3)(j), you don't also register and self-declare under Section 6B — that's double compliance, not extra safety. Confirm which mechanism actually applies to your situation first.
Frequently Asked Questions
What is the non-resident rental income tax rate in Kenya?
30% on gross rent from immovable property (land and buildings), and 15% on rent from movable property. It's a final withholding tax — no expense deductions apply. It took effect 1 July 2026 under the Finance Act 2026.
Who has to pay non-resident rental income tax?
Any non-resident individual or entity earning rental income from property situated in Kenya, regardless of whether they let the property directly or through a local agent.
Is this the same as withholding VAT?
No. Withholding VAT is a 2% deduction on certain VAT-registered supplies, covered in our withholding VAT guide. Non-resident rental income tax is a separate income tax regime specifically for non-resident landlords.
What's the filing deadline?
Returns and payment are due by the 20th day of the month following the month rent was received.
Do I need eRITS to comply?
No. eRITS is the residents-only system for the Monthly Rental Income (MRI) regime (KES 288,000–15 million/year). Non-resident landlords register and file through iTax's non-resident income tax category instead — a separate system under the new Section 6B of the Income Tax Act.
What if my property manager already withholds tax on my behalf?
If a resident agent is appointed to withhold under Section 35(3)(j), you don't also self-declare under the new Section 6B regime — only one mechanism applies at a time. Confirm with your agent which arrangement is actually in place before you register for anything.
What happens if a non-resident landlord doesn't comply?
Non-compliance exposes the landlord (and potentially the local agent managing the property) to penalties and interest under the standard KRA enforcement regime for withholding taxes.
Need Help With KRA Compliance?
If you manage property for a non-resident landlord, or you are one, we can help you work out exactly what you owe and how to file it correctly.