1. What is Kenya Residential Rental Income Tax?

The Kenya residential rental income tax is a tax levied on income derived from renting out residential properties in Kenya. The current tax rate is 7.5% of the taxable rental income (gross income minus allowable expenses).

2. How Does the Calculator Work?

The calculator uses the following formulas:

Where:

• Gross Rental Income — Total rental income received (KES)
• Allowable Expenses — Deductible expenses related to the rental property (KES)
• 7.5% — Current residential rental income tax rate in Kenya

Explanation: The calculation first determines the taxable income by subtracting allowable expenses from gross income, then applies the 7.5% tax rate to the resulting amount.

3. Importance of Rental Income Tax Calculation

Details: Accurate rental income tax calculation is crucial for compliance with Kenya Revenue Authority (KRA) regulations, avoiding penalties, and proper financial planning for property investors.

4. Using the Calculator

Tips: Enter gross rental income and allowable expenses in Kenyan Shillings (KES). All values must be non-negative. The calculator will automatically compute the taxable income and tax payable.

5. Frequently Asked Questions (FAQ)

Q1: What expenses are allowable deductions?
A: Allowable expenses include repair costs, insurance premiums, management fees, land rates, and mortgage interest (not principal).

Q2: When is rental income tax due in Kenya?
A: Rental income tax is payable by the 20th day of the month following the income receipt.

Q3: Is there a different rate for commercial properties?
A: Yes, commercial property rental income is taxed at 10%, while residential is at 7.5%.

Q4: What if my expenses exceed my rental income?
A: The taxable income would be zero (no tax payable), but losses can't be carried forward to future years.

Q5: How do I pay this tax?
A: Through KRA's iTax platform by filing a return and making payment via approved channels.