Property tax changes Kenya 2026: what buyers and landlords must know
Property-related taxation in Kenya has evolved meaningfully through the Finance Act and KRA enforcement focus. Here is the honest 2026 summary on what changed, what is enforced harder, and what every buyer and landlord must know.
Property-related taxation in Kenya has evolved meaningfully through the Finance Act and KRA enforcement focus. Here is the honest 2026 summary.
Purchase-side taxation
- Stamp duty on Nairobi property: 4 percent of purchase price
- Land Control Board consent fees (where applicable)
- KRA PIN required for both buyer and seller; Lands Office cross-checks
- Withholding tax on commission to agents
Rental income taxation
- Monthly Rental Income (MRI) regime: 7.5 percent of gross rental income (where applicable)
- Above the MRI threshold or where owner elects: corporate or personal income tax (up to 30 percent)
- KRA enforcement on undeclared rental income strengthened
- iTax filing required regardless of regime
Capital Gains Tax (CGT)
- 15 percent of net gain on sale of property
- Primary residence exemption applies under specific conditions
- Exemptions and deductions clarified in recent Finance Acts
- KRA enforcement on undeclared gains tightened
VAT on commercial and serviced
- VAT applies to commercial property sale and rental above threshold
- Serviced apartments above threshold: VAT applies
- Pure long-term residential rent: VAT exempt
Tourism Levy on short-let
- 2 percent of revenue (Tourism Levy) on short-let where applicable
- Plus VAT above threshold
- Plus income tax on net
Land Rates and Rent
- Annual Land Rates (county): 0.115 percent of unimproved value in Nairobi (varies by county)
- Annual Land Rent (national, on leasehold): nominal but must be paid; arrears block transfers
- County rates clearance certificate required for transfer
Enforcement focus 2026
- KRA on undeclared rental income (data sharing with utilities and banks)
- KRA on undeclared CGT on property sale
- County rates clearance enforcement at Lands Office on transfer
- Cross-referencing iTax with bank and Lands data
Practical implications
- Declare rental income properly; MRI is straightforward and relatively low
- Plan CGT in any sale; document original cost basis carefully
- Pay rates and rent annually; do not let arrears accumulate
- Engage qualified tax counsel for structuring decisions
- Diaspora landlords: KRA non-resident process applies; 7.5 percent MRI option useful
Tax compliance is the cheapest professional service a Nairobi landlord buys. It also produces the most peace of mind.
How Goldstay handles it
For landlord clients we coordinate with qualified tax counsel for ongoing compliance. Read also our pieces on property taxes Kenya and rental income tax MRI.
The Goldstay Legal Desk covers Kenyan and Ghanaian property law, title diligence, sale agreements, stamp duty, succession and the regulatory environment that property owners and investors encounter. Pieces are written in collaboration with our advocate partners.
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