Monthly Rental Income tax at 7.5% of gross rent within the MRI band.
Annual MRI tax
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Monthly MRI tax
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Treatment
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A flat charge on rent, not on profit
Most taxes in Kenya land on what you earn after costs. Monthly Rental Income tax, usually shortened to MRI, works differently. It takes a flat slice of the gross rent a residential landlord collects and ignores expenses entirely. There is no deduction for the agent fee, the repairs, the service charge, or the interest on the loan you used to buy the unit. You add up the rent your tenants paid, apply one rate, and that is the tax. The trade for losing the deductions is simplicity: no detailed accounts, no expense receipts to defend, and a return you can file from a phone.
The rate this calculator applies is 7.5 percent of gross residential rent, down from the 10 percent that applied before the change a couple of years ago. Because rates and bands have moved with successive Finance Acts, treat 7.5 percent as the figure modelled here and confirm the current rate on the Kenya Revenue Authority rental income pages before you file. The mechanism, a fixed percentage of gross rent with no expense relief, has been stable even as the headline number has shifted.
The two limits that decide whether MRI even applies
MRI does not catch every landlord. It sits inside a band. The lower limit modelled here is KES 288,000 of annual rent, which is KES 24,000 a month. Earn less than that across the year and the calculator returns zero, because small residential rent falls outside the MRI net. The upper limit is KES 15 million a year. Cross that ceiling and you leave MRI altogether, moving onto normal income tax where, helpfully, expenses do come back into play. Commercial rent is outside MRI too and follows the ordinary rules.
This matters because the same rent can sit in three different worlds depending on size. The tool flags which one you are in. Below the floor it shows the rent as not subject to MRI. Inside the band it applies the 7.5 percent. Above the ceiling it tells you to use normal income tax with expenses instead, which is often the better deal at that scale precisely because you regain the deductions.
A KES 1.2 million letting, worked through
Take a landlord whose residential units bring in KES 1,200,000 of gross rent for the year, which is KES 100,000 a month. That sits comfortably inside the band, so MRI applies at the rate this calculator uses.
| Step | Working | KES |
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So the year's tax is KES 90,000, which the tool also expresses as KES 7,500 a month. Notice the rent is collected gross and taxed gross: the chart below shows how little of the headline rent the tax actually claims.
Who files MRI, and the trap of vacant months
The tool is built for an individual resident landlord letting homes, flats, or rooms, the most common rental position in Kenya. If a managing agent handles your property, MRI still runs through your own return even though the agent may have withheld tax on the way. A frequent mistake is forgetting that MRI is charged on rent actually received, so a unit that sat empty for three months only counts the nine months it earned. Enter the rent you genuinely collected for the year, not the rent the lease promised, and the figure the calculator returns will match what you owe.
One practical judgement: if your rent is creeping toward the KES 15 million ceiling, model both treatments before you assume MRI is best. At that level your real expenses, interest, repairs, and management can be large enough that normal income tax with deductions beats a flat 7.5 percent on the gross. The flat charge is generous to landlords with low costs and harsh on those carrying a heavy mortgage. Because the threshold and rate have been revised before, verify both with the KRA when you plan around them.
Is MRI charged per property or on my total rent?
On your total residential rent for the year, not property by property. If you let three flats, you add the rent from all three and test the combined figure against the KES 288,000 floor and the KES 15 million ceiling. Two small units that each earn under the floor can still pull you into MRI once combined.
Can I deduct my mortgage interest under MRI?
No. MRI is deliberately a gross charge with no expense relief of any kind, so loan interest, repairs, and agent fees are all ignored. Interest deductions only return if your rent exceeds the ceiling and you move onto normal income tax, or for owner-occupied homes where a separate mortgage relief applies to your own PAYE rather than to rent.