KRA Proposes New Tax Rules Targeting Landlords and Employers [Full Details]

The Kenya Revenue Authority (KRA) has proposed new tax rules that could directly affect landlords and employers, as the government moves to improve tax collection and support youth employment.

In a notice dated Tuesday, May 5, 2026, KRA said it has prepared two draft regulations, the Income Tax (Residential Rental Income Tax) Regulations, 2026 and the Income Tax (Set-Off Tax Rebate for Graduate Apprenticeships) Regulations, 2026, and is inviting Kenyans to give their views before they are finalised.

KRA Proposes New Rules for Landlords

Under the proposed changes, the rental income tax will apply to landlords earning between Ksh288,000 and Ksh15 million per year from residential properties.

If approved, landlords will be required to:

• File tax returns every month
• Pay the tax by the 20th day of the following month after receiving rent
• Register their rental properties in an online system set up by KRA

The draft rules also make it clear that landlords will not be allowed to deduct expenses such as repairs or maintenance when calculating tax.

Also Read: EXCLUSIVE: ‘Not True’ — KRA Boss Does Not Own KSh 30 Billion in Wealth

Landlords who do not want to be under this tax system will be required to notify KRA at least three months before the end of the financial year.

Those earning above Ksh15 million annually from rent must inform the Commissioner. Failure to do so will be treated as an offence under the law.

The new rules will also replace the current rental income tax regulations introduced in 2016.

Tax Relief for Employers

At the same time, KRA is proposing a tax incentive to encourage companies to hire fresh graduates.

Also Read: KRA Outlines Step-by-Step Process to Stop Tax Deductions for Deceased Persons

Under the draft regulations, employers who hire graduates as apprentices will be allowed to claim a tax rebate equal to 50% of the salaries paid to them.

To qualify:

• The apprenticeship must last between six and twelve months
• There must be a written contract between the employer and the graduate
• The contract must be approved and registered by the relevant training authority

After completing the programme, the employer must issue a certificate, which will also be verified by the Director-General in charge of training.

Employers will also be required to keep records of the apprenticeship for at least five years.

Public Participation

KRA said the draft regulations are available on its website and called on members of the public, professionals and stakeholders to submit their comments.

Submissions should be sent to the Commissioner General of KRA by May 25, 2026, through email or post.

Follow our WhatsApp channel for instant news updates

KRA officers busy at work. PHOTO/KRA