The Kenya Revenue Authority (KRA) is reviewing the tax records of more than one million property owners to establish whether they have accurately declared their rental income.
The authority disclosed the initiative on Wednesday, October 28, 2026, during a presentation to the National Assembly’s Departmental Committee on Finance and National Planning.
KRA said it is using digital systems to compare property ownership records with rental income declarations submitted by landlords as part of efforts to improve tax compliance.
How will the KRA review work?
The tax authority clarified that being flagged during the exercise does not automatically mean a landlord has violated tax laws or owes additional taxes.
Instead, the review seeks to identify discrepancies between property records and declared rental earnings that may point to underreporting.
According to KRA’s tax assessment guidelines, taxpayers must be informed of any identified gaps and given an opportunity to respond before a formal assessment or tax demand is issued.
“Where gaps are identified, leading to tax liability, the taxpayer is informed both orally and in writing and is requested to respond to the issues before an assessment or demand is issued,” the authority states in its online guidance.
Landlords who disagree with an assessment can formally object to the decision and, if necessary, appeal to the Tax Appeals Tribunal.
Documents landlords should review
Property owners are advised to ensure their tax returns accurately reflect their rental earnings and are supported by relevant documentation.
These include tenancy agreements, rent payment records, property ownership certificates and filed tax returns.
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Landlords should also account for changes in property ownership, units managed by agents and periods when rental units remained vacant, as these factors could explain discrepancies in the records.
The exercise forms part of KRA’s wider efforts to strengthen tax compliance in the rental property sector, where some landlords have failed to meet their tax obligations.
What are KRA’s rental income tax rates?
Under Kenya’s current rental income tax rules, residential landlords earning less than KSh 288,000 annually qualify for an exemption from residential rental income tax.
Eligible landlords whose annual residential rental income falls within the applicable range are subject to a tax rate of 7.5% of gross rental income. Different tax requirements apply to commercial property owners and non-resident landlords.
