The Monthly Residential Rental Income (MRI) Tax is a simplified tax regime in Kenya designed for landlords earning modest residential rental income. It was introduced to make tax compliance easier and encourage the voluntary declaration of rental income.
MRI applies to residential rental income not exceeding KES 15 million per year, which is taxed at a flat rate of 7.5% of gross rental income. This means the tax is calculated directly on total rent received no deductions for expenses are allowed.
Key Features of MRI in Kenya
- Tax Rate: 7.5% of gross rental income
- Income Threshold: Applies where annual rental income is KES 288,000 to KES 15 million
- Property Type: Residential property only (not commercial)
- Simplified Filing: No need to prepare full accounts
- No Expense Deductions: Tax is based on gross receipts
Why MRI Matters
MRI simplifies tax compliance for small and medium landlords. Instead of complex accounting and expense tracking, landlords only calculate 7.5% of total rent, making compliance quicker and more predictable.
If you are unable to manage your rental compliance on your own, it is always good to speak to an expert like us at ushuru.co.ke Get in touch, and we will be able to help you.
Disclaimer: Any advice in this publication is limited to the conclusions specifically set forth herein and is based on the completeness and accuracy of the stated facts, assumptions and/or representations included. In rendering our advice, we may consider legal authorities that are subject to change, retroactively and/or prospectively, and any such changes could affect the validity of our advice. We will not update our advice for subsequent changes or modifications to the law and regulations, or to the judicial and administrative interpretations thereof.
