The Finance Act, 2026 introduces a new tax regime for non-residents earning rental income from property located in Kenya.
Previously, taxation of such income was handled under the general income tax framework. The new law now establishes a simplified final withholding tax system specifically for non-resident landlords.
What Has Changed?
- Rental income earned by a non-resident from property situated in Kenya will now be subject to a final withholding tax.
- Non-resident landlords must register through a simplified registration framework.
- They must file monthly returns and pay the tax by the 20th day of the month following the month in which the rent is paid.
Important Exception
The simplified registration system does not apply where a resident person receives rent on behalf of a non-resident landlord and the rent is already subject to Withholding Tax under Section 35(1)(c) of the Income Tax Act.
What This Means
- If you are a non-resident earning rental income directly from property in Kenya, you may now have a separate monthly tax compliance obligation.
- If a resident agent receives rent on your behalf and deducts WHT, the new registration requirement generally will not apply.
- Property owners, agents, and property managers should review their rental arrangements to determine which compliance framework applies.
A Point to Watch
While the Finance Act introduces this new tax regime, it does not specify the applicable withholding tax rate in the Third Schedule. Further clarification from KRA or future legislative amendments is expected before implementation can be fully understood.
Need help understanding how the Finance Act affects you or your business?
TAX HOME KENYA LIMITED
📱 +254 725 416 982
📧 taxhomekenyalimited24@gmail.com
Simplifying Your Tax Journey.