Updated 31 October 2026
KRA mortgage relief lets you deduct up to KSh360,000 a year (KSh30,000 a month) of interest on a home loan from your taxable income, as long as the loan is from a qualifying lender and the house is your own home. Strictly, it is now a deduction rather than a relief: the interest is subtracted before PAYE is worked out, which lowers your tax by the interest amount multiplied by your tax rate.
Updated October 2026. Source: KRA public notice on PAYE changes and KRA’s FAQ on allowable deductions.
How much you can deduct
| Period | Old limit | Current limit |
|---|---|---|
| Per month | KSh25,000 | KSh30,000 |
| Per year | KSh300,000 | KSh360,000 |
The higher cap came in with the Tax Laws (Amendment) Act, 2024, effective December 27, 2024. The Finance Act, 2025 then widened the deduction to cover loans used to construct a home, in addition to buying or improving one.
Who qualifies for KRA mortgage relief
- The loan must be from one of the first six financial institutions listed in the Fourth Schedule to the Income Tax Act; these include banks licensed under the Banking Act. Ask your lender to confirm.
- The money must be used to buy, improve or (since 2025) build residential premises.
- You must live in the house yourself. Rental property interest is handled differently, under rental income rules; see rental income tax in Kenya if that applies.
- Only one home qualifies.
How much tax it saves
The saving equals the interest you deduct times your marginal PAYE rate. For example, if you pay KSh30,000 a month in mortgage interest and your top band is 30%, your PAYE falls by about KSh9,000 a month. If you pay KSh15,000 in interest, the saving at 30% is about KSh4,500. Check which band applies to you in our PAYE tax bands table.
How to claim
Through your employer (monthly)
- Get a certificate of interest paid from your lender, showing the loan and the interest charged.
- Give it to HR or payroll and ask them to apply the mortgage interest deduction in your PAYE.
- Check your next payslip: taxable pay should drop by the interest amount, up to KSh30,000. Our payslip explainer shows where it appears.
On your annual iTax return
If your employer did not apply it, or you are self-employed, claim it in your annual income tax return on iTax using the interest certificate. Keep the certificate for at least five years in case KRA asks. See how to file KRA returns on iTax.
Other deductions that changed at the same time
The same 2024 law made these deductible from taxable employment income:
- Affordable Housing Levy contributions (the old 15% affordable housing relief was scrapped);
- Social Health Insurance Fund (SHIF) contributions;
- post-retirement medical fund contributions, up to KSh15,000 a month;
- pension and provident fund contributions, up to KSh30,000 a month (KSh360,000 a year).
Shopping for a home loan? Start with our guide on how to get a mortgage in Kenya.
FAQ
How much is mortgage relief in Kenya?
You can deduct mortgage interest of up to KSh360,000 a year (KSh30,000 a month) from your taxable income.
Can I claim mortgage relief on a sacco loan?
Only if the lender is one of the institutions listed in the Fourth Schedule to the Income Tax Act. Ask your lender whether its interest certificate qualifies.
Does mortgage relief cover building a house?
Yes. Since the Finance Act, 2025, loans used to construct a residential home also qualify.
Is the affordable housing relief still available?
No. It was replaced in December 2024 by a deduction of Affordable Housing Levy contributions from taxable pay.
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