Non-Resident Rental Income Tax in Kenya: What Overseas Landlords Must Do After the Finance Act 2026

If you own rental property in Kenya but are not a Kenyan tax resident, the Finance Act, 2026 gave you a new tax and a new deadline. Non-resident rental income tax took effect on 1 July 2026, and it works differently from the regime that applies to resident landlords. This article sets out what section 4 of the Act actually says, who has to act, and what the Act leaves unanswered.

What the non-resident rental income tax changes

The Finance Act, 2026 (Act No. 19 of 2026) was assented to on 23 June 2026. Section 4 inserts a new section 6B into the Income Tax Act. Under section 6B(1), where the income of a non-resident person accrues in or is derived from the use or occupation of property situated in Kenya, a tax called non-resident rental income tax is payable by that person. It is a final tax on the income, at the rate specified in the Third Schedule.

Under section 1 of the Act, every section that is not separately dated came into operation on 1 July 2026, and section 4 is not separately dated. We found no transitional provision addressing rent for earlier periods.

Registration, returns and the 20th of the month

Section 6B(2) places two duties on the non-resident landlord. First, register and account for the tax through a simplified registration framework prescribed by the Commissioner. Second, submit a return and pay the tax on or before the twentieth day of the month following the end of the month for which the rent is paid. Rent for July, for example, is due for return and payment by 20 August. In practice this is a monthly cycle for as long as the property is let.

The Kenya Revenue Authority describes the change in the same terms in its Finance Act 2026 guidance: non-residents earning rental income from Kenyan property must register under a simplified framework and file and pay by the 20th of the following month, unless a resident agent is withholding on their behalf.

The agent route

Section 6B(3) disapplies the registration, return and payment duties where the rental income is received by a resident person on behalf of the non-resident, and that resident person is subject to the deduction of tax under section 35(1)(c) of the Income Tax Act. In other words, if a resident property manager or agent collects the rent and is required to withhold, the withholding takes the place of the landlord’s own monthly filing.

That makes the arrangement with your agent a compliance question, not just a commercial one. Check whether your agent collects rent in a way that triggers withholding, whether they will actually withhold and remit, and what happens to the landlord’s position if they do not. If rent is paid directly to an overseas account, or to a family member without an agency arrangement, the landlord’s own duties under section 6B(2) are the ones to read.

What the Act does not tell you

Two points need care. First, the rate. Section 6B refers to the Third Schedule, but the only amendment the Act makes to the Third Schedule, in section 21, deals with other items and does not insert a figure for non-resident rental income. We therefore do not state a rate here. Confirm it against the Third Schedule as it now stands and against current KRA guidance before you compute any liability.

Second, the mechanics. The “simplified registration framework” is to be prescribed by the Commissioner, and we have not seen the operational details, such as the form of registration or the return. Watch for KRA’s implementation notices.

If you hold the property through a REIT

The Act also changed the position for landlords who move property into a real estate investment trust. Paragraph 76 of the First Schedule to the Income Tax Act now exempts capital gains relating to the transfer of property to a REIT registered by the Commissioner under section 20(1), and section 54 of the Act amends section 96A of the Stamp Duty Act to cover instruments that convey a beneficial interest in property to a REIT. KRA describes the latter as an exemption from stamp duty for REIT transfers. These reliefs sit in different legislation from the rental tax, so any restructuring decision needs its own analysis. See our guide to real estate investment structures in Kenya and our note on REIT manager licensing.

A checklist for non-resident landlords

1. Confirm that you are a non-resident person for Kenyan tax purposes, using the residence tests in the Income Tax Act. Do not assume it from where you live.
2. List every let property and how rent reaches you: direct, through an agent, or through a relative.
3. If you use an agent, ask in writing whether they are subject to withholding under section 35(1)(c) and whether they will remit on your behalf.
4. If you have no qualifying agent, register through the KRA framework and diarise the 20th of each month.
5. Confirm the rate before you budget, and keep rent records for each month.
6. Check the ownership side too. Non-citizens hold land in Kenya on leasehold, and the limits are covered in our guide to non-citizen land ownership.