How to track rental income for KRA in Kenya has become one of the most pressing questions for landlords, property managers, and real estate investors as the Kenya Revenue Authority intensifies enforcement through the new Electronic Rental Income Tax System (eRITS). The days of informal rental management are ending. KRA collected approximately KES 17 billion annually from rental income tax, yet the potential is estimated to exceed KES 100 billion—meaning most landlords are not paying what they should.
With eRITS now fully operational and mandatory registration on the horizon for all landlords in the monthly rental income band, tracking rental income accurately for tax purposes is no longer optional—it is a legal necessity. RentalDesk provides a comprehensive solution that helps landlords and property managers track rental income, reconcile M-Pesa payments, and generate KRA-ready reports from one centralized platform.
Why Tracking Rental Income for KRA Matters
The how to track rental income for KRA in Kenya conversation is urgent because the consequences of non-compliance are severe. For those who fail to comply, penalties can include fines, backdated tax claims, frozen bank accounts, and even court cases. Landlords could face penalties ranging from Ksh 2,000 to over Ksh 50,000 for late filing and payments.
The Kenya Revenue Authority has made it clear that eRITS is its way of closing loopholes in the rental market and ensuring landlords meet their tax obligations. By combining digital tools like GavaConnect, data analytics, and geo-mapping strategies, KRA can now identify properties, verify ownership, and ensure that more landlords comply. Understanding how to track rental income for KRA in Kenya is the first step toward compliance, and RentalDesk provides the tools needed to make that process seamless.
Understanding the Monthly Rental Income (MRI) Tax
The how to track rental income for KRA in Kenya process begins with understanding the Monthly Rental Income (MRI) tax regime. The MRI tax was launched in 2016 targeting landlords who earn between KES 288,000 and KES 15 million annually from residential rental income. The government reduced the MRI tax rate from 10% to 7.5% of gross income, effective 1 January 2024.
Key MRI Facts
| Detail | Requirement |
|---|---|
| Rate | 7.5% of gross rent |
| Applicability | Residential rental income between KES 288,000 and KES 15M annually |
| Final Tax | No expense deductions allowed |
| Deadline | 20th of the following month |
| NIL Returns | Required for months with no rent once registered |
| Commercial Rent | Uses normal income tax, not MRI |
Source: LeadAfrik
The MRI is a final tax, which means you cannot claim expenses or deductions against the rental income. If you prefer to deduct expenses, you would have to elect out into the normal income-tax regime, which only makes sense above the MRI band. Understanding these fundamentals is essential for how to track rental income for KRA in Kenya effectively.
What Is eRITS and Why It Changes Everything
The how to track rental income for KRA in Kenya landscape has been transformed by eRITS—the Electronic Rental Income Tax System. KRA built eRITS to address a significant compliance gap: rental income tax collections generate approximately KES 17 billion annually, but the potential is estimated to exceed KES 100 billion.
What eRITS Does
The Electronic Rental Income Tax System (eRITS) is a digital platform launched by the KRA in April 2025, designed to simplify the registration of properties, filing of returns, and payment of Monthly Rental Income (MRI) tax for landlords. By September 2025, KRA required all property owners to update their details and onboard their properties onto the system. You can access eRITS through erits.kra.go.ke or via the eCitizen portal.
The system enables management of properties, filing and payment of rental taxes in a simple and convenient way. It runs on the government’s integration platform, Gava Connect, which enables KRA to process tax filings and payments in real-time.
Mandatory Registration Coming
The Draft Income Tax (Residential Rental Income Tax) Regulations 2026, open for public comment until May 25, 2026, proposes making registration on eRITS mandatory for all landlords within the existing monthly rental income tax band. KRA proposes that persons subject to rental income tax be required to register on this electronic platform. This means that understanding how to track rental income for KRA in Kenya through eRITS will soon be a legal requirement, not an option.
How to Register Your Properties on eRITS
The how to track rental income for KRA in Kenya process starts with property registration. Landlords log in via erits.kra.go.ke, register all owned properties, and input details including type, rent, and tenants.
Step-by-Step Registration
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Access eRITS: Visit https://erits.kra.go.ke or the eCitizen public portal
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Create an Account: If you do not already have one, sign up on eRITS or through the eCitizen portal
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Register Your Properties: Add details of the rental properties you own or manage
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Input Property Details: You’ll need to update details such as property type, monthly rent, and tenant information
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Link Tenant PINs: The system links your property to the person renting it, requiring tenant KRA PINs
KRA urges all persons owning rental properties and earning rental income to update or correct their property details as appropriate in the new KRA system. For any clarification or challenges experienced, KRA can be contacted via phone calls and WhatsApp at 0711 099 999, or through social media.
How to File Monthly Rental Income Returns
The how to track rental income for KRA in Kenya process includes monthly filing requirements. As a landlord, you must file your MRI return and make payment by the 20th of the following month, even if you received no rent (in that case, you file a NIL return).
Filing Process via iTax
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Login to iTax: Go to itax.kra.go.ke
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Navigate to Returns: Under the returns tab, click on “File Return”
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Select Obligation: Choose “Income Tax – Rental Income”
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Enter Gross Rent: Enter the gross rent for the month; the system computes 7.5% automatically
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Submit: Submit the return
Payment Process
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Generate PRN: Payments → generate a Payment Registration Number (PRN), tax head “Income Tax – Rent”
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Pay via M-Pesa: Use KRA Paybill 572572 with your PRN as the account number, or pay via bank
You can now also file and pay your monthly rental income tax using the new KRA M-service App. This makes how to track rental income for KRA in Kenya more accessible than ever before.
Common Mistakes to Avoid
The how to track rental income for KRA in Kenya journey includes avoiding common pitfalls that lead to penalties and overpayment.
Mistake 1: Deducting Expenses from Rent
MRI is 7.5% of GROSS rent—no expenses or interest are deductible. This is a final tax, meaning you cannot claim repairs, mortgage interest, or any other deductions. If you want to deduct expenses, you would have to elect out into the normal income-tax regime, which only makes sense above the MRI band.
Mistake 2: Missing the Monthly 20th Deadline
Returns and payments are due by the 20th of the month following rent receipt. People often confuse this with the 30 June annual date. The monthly deadline is strict, and late filings attract penalties.
Mistake 3: Not Filing NIL MRI for Vacant Months
Once you are registered for the rental obligation, file a NIL MRI return for that month. Skipping it can attract a penalty even though no tax was due. This is a common oversight that catches many landlords off guard.
Mistake 4: Filing the Return but Forgetting to Pay
Filing the return is only half the process. You must also generate the PRN and actually pay the tax. Filing without payment still results in non-compliance.
Penalties for Non-Compliance
The how to track rental income for KRA in Kenya process must include awareness of penalties. Late filing of MRI returns attracts a penalty of Kshs. 2,000 or 5% of the tax due, whichever is higher for individuals. Late payment incurs a 5 percent penalty on the tax due plus interest at 1 percent per month compounded.
For companies, the penalty for late filing is Kshs. 20,000 or 5% of tax due, whichever is higher. Late payment interest is 1% per month on the unpaid tax until the tax is paid in full.
How RentalDesk Simplifies KRA Rental Income Tracking
RentalDesk is built specifically for the Kenyan market, making it the ideal tool for how to track rental income for KRA in Kenya. The platform addresses every aspect of the compliance process.
Automated M-Pesa Reconciliation
RentalDesk integrates directly with M-Pesa, allowing tenants to pay rent easily via STK Push or Paybill. When a tenant pays, the system extracts the amount, phone number, account reference, and transaction ID, matches the account reference to the correct tenant and unit, credits the tenant account, generates a receipt, and updates the dashboard in real-time. This eliminates manual reconciliation and ensures that every rent payment is accurately recorded for KRA reporting.
Real-Time Income Tracking
RentalDesk provides real-time visibility into rental income across all properties. Landlords can instantly see total rent expected, collected, and outstanding. This real-time tracking is essential for how to track rental income for KRA in Kenya because it ensures that gross rent figures are always accurate and up to date.
KRA-Ready Financial Reports
RentalDesk generates comprehensive financial reports including rent collection summaries, arrears aging reports, income and expense statements, and property performance reports. These reports are suitable for local tax filing and can be used to populate MRI returns accurately. The system generates KRA-compliant financial statements, making tax filing straightforward.
Multi-Property Portfolio Management
For landlords with properties in different locations, RentalDesk provides a unified dashboard where landlords can view all properties at a glance, monitor rent collection per building, and generate property-specific reports. This is essential for how to track rental income for KRA in Kenya across diverse portfolios.
Tenant and Landlord Portals
RentalDesk offers tenant and landlord portals where users can view invoices, payment history, and outstanding balances. This transparency improves trust and reduces disputes, while also ensuring that all rental income is properly documented.
Cloud-Based Access
RentalDesk is cloud-based, allowing landlords to access rental income data from anywhere—on desktop or mobile. For diaspora landlords managing properties in Kenya from abroad, this remote access is invaluable for how to track rental income for KRA in Kenya.
The Future of Rental Income Tracking in Kenya
The how to track rental income for KRA in Kenya landscape is evolving rapidly. With eRITS now mandatory for landlords in the MRI band, and with KRA integrating with Ardhisasa and county systems for geo-referencing and data verification, compliance will only become more rigorous.
KRA’s long-term plan is to capture untaxed property income by combining digital tools like GavaConnect, data analytics, and geo-mapping strategies to identify properties, verify ownership, and ensure that more landlords comply. Landlords who adopt digital tracking tools like RentalDesk will be better positioned to comply with these requirements and avoid penalties.
How to Get Started
Implementing how to track rental income for KRA in Kenya with RentalDesk is straightforward:
Step 1: Sign Up for RentalDesk
Visit RentalDesk and create your account. Choose a plan that matches your portfolio size.
Step 2: Set Up Your Properties
Add your properties, units, and tenants to the system, including lease agreements and rent amounts.
Step 3: Configure M-Pesa Payment Collection
Set up M-Pesa Paybill or STK Push for rent collection to enable automatic reconciliation.
Step 4: Activate Financial Reporting
Once your data is in the system, RentalDesk automatically generates comprehensive financial reports.
Step 5: Register on eRITS
Use your RentalDesk reports to register your properties on eRITS and file your monthly MRI returns accurately.
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya
- How to track rental income for KRA in Kenya