Construction

Kenya has introduced a brand new tax category for diaspora landlords. Courtesy of the Finance Act, 2026. • It is now called NON-RESIDENT RENTAL INCOME TAX. Here is how it works. If you live abroad, and you are not tax resident in Kenya, And you earn rental income from property situated in Kenya, you are now required to: - Register for this new tax category. - Register your rental properties with KRA. - File a monthly tax return by the 20th. - Pay 30% of the gross rent collected. You are not allowed to deduct property running costs before calculating the tax. This tax applies to both: - Residential properties & - Commercial properties. For example. Say you live in the UK but own a commercial rental building in Nairobi. Renting out shops. You collect Ksh 1 million in rent every month. You also pay: - Property manager = Ksh 100,000 - Security company = Ksh 50,000 You shall pay 30% tax on the full Ksh 1 million = Ksh 300,000. The 100k paid to the property manager and the 50k paid to the security company are not deductible. Effective July 1, 2026. Early tax planning will become increasingly important under this new category.