Airbnb Tax in Kenya: Rental Income Tax, Turnover Tax and What KRA Says

Updated 28 October 2026

Airbnb income in Kenya is taxable, and for most hosts the question is which regime applies: Residential Rental Income Tax (MRI) at 7.5% of gross rent, filed monthly on iTax by the 20th, or ordinary income tax on business profits declared in the annual return. KRA’s published guidance does not single out short-stay lets, so the answer depends on how your listing is run. Turnover Tax does not apply, because KRA’s own page excludes rental income from it. This guide sets out what KRA’s pages actually say, how each regime treats an Airbnb, and how to file.

All rates, thresholds and penalties below were checked on October 27, 2026 on kra.go.ke. Tax on short-stay lets is not settled in KRA’s public guidance, so where we flag a judgement call, get a written answer from KRA before you file.

Airbnb Tax in Kenya: The Options at a Glance

Does MRI Apply to an Airbnb?

KRA describes MRI as tax on “rental income accrued or derived in Kenya for the use or occupation of residential property” by a resident person. A furnished apartment let by the night is still residential property being occupied in exchange for payment, which is why many hosts file under MRI. On the other hand, KRA exempts rental income from commercial property from MRI, and a short-stay unit that runs like a small hotel, with daily cleaning, breakfast, a reception or many units, starts to look like a hospitality business rather than a residential letting.

There is no KRA page that draws this line for Airbnb hosts. A practical way to think about it:

• Closer to MRI: one or a few residential apartments, guests get the unit and little else, cleaning between stays only.
• Closer to business income: many units run as an operation, staff on site, meals or tours sold, a registered company trading as a hospitality business.

If you are unsure, email KRA (callcentre@kra.go.ke) describing your set-up, ask which obligation to register, and keep the reply with your records.

How MRI Works for a Short-Stay Host

• Rate: 7.5% of gross rent received, effective January 1, 2024. Gross means what guests paid for the stay, before cleaning, utilities or platform fees.
• Final tax: you do not declare this income again in your annual return.
• No deductions: KRA says no expenses, losses or capital deductions are allowed.
• Band: KRA’s page applies MRI to residential rental income above KSh 280,000 and up to KSh 15 million a year. Above KSh 15 million, rent goes into the annual return with your other income.
• Opting out: you can elect, by written notice to the Commissioner, not to be taxed under MRI and use the annual regime instead.
• Deadline: file and pay by the 20th of the month after the rent is received. January bookings are due by February 20. File a nil return for any month with no income.

Worked Example

Suppose a one-bedroom unit earns KSh 90,000 from guests in March. MRI for March is 7.5% of KSh 90,000, which is KSh 6,750, due by April 20. Over a year at that level (KSh 1,080,000 gross), total MRI would be KSh 81,000. These booking figures are illustrative; use your actual payouts and the gross amount guests paid.

Note: one section of KRA’s rental income page still mentions a 10% rate when describing the return. The same page states the current rate as 7.5% from January 1, 2024, and that is what iTax applies.

When the Annual Regime Is Better

Because MRI ignores costs, hosts with high running costs sometimes pay more under it than they would on profit. Airbnb units carry heavy expenses: furnishing, cleaning, Wi-Fi, electricity, water, service charge, management fees and platform commission. KRA’s worked example for the annual regime deducts items such as land rent and rates, insurance, agent’s fees, repairs, loan interest and electricity from gross rent before tax.

Electing out of MRI means keeping proper books and filing a full annual return, so do the sums for a full year before switching. Our tax calculators help you compare the two.

Why Turnover Tax Does Not Apply

TOT is 1.5% of gross sales for businesses turning over more than KSh 1 million and up to KSh 25 million a year. KRA’s TOT page lists rental income as one of the incomes TOT “shall not apply to”. So a host cannot pick TOT for room income. If you also sell separate services (for example airport transfers or tours), that income is a different question. Our guide to turnover tax vs income tax vs VAT explains how the regimes fit together, including KRA’s note that a TOT business with vatable supplies of KSh 5 million or more must also register for VAT.

How to Register and File Airbnb Income on iTax

1. Register the property: on itax.kra.go.ke go to Registration, then “Register Property Details”, choose New Property and enter the details and an estimated monthly rental income. For short-stay units there is no single tenant PIN, so ask KRA how to complete that field.
2. File monthly: under Returns, choose File Return, select “Income Tax – Rental Income”, enter the month’s gross rent and submit. Tax is computed automatically.
3. Pay: under Payments, choose New Payment Registration, tax head Income Tax, sub-head “Income tax – rent”, payment type Self-Assessment Tax, then pay by M-Pesa or bank with the payment registration number.

KRA’s M-Service App can also file and pay monthly rental income tax. Our step-by-step guide on how to file rental income tax on iTax has screenshots of each stage.

Penalties for Late Filing and Payment

Missed months add up quickly. You can check KRA penalties on iTax, file an amended KRA return if you declared the wrong amount, or apply for a KRA payment plan to clear arrears in instalments.

Other Rules Hosts Must Follow

Tax is only one obligation. Under the Tourism (Tourism Enterprises) Regulations, 2025, short-stay hosts need a Tourism Regulatory Authority licence and must show the licence ID on online listings; see our guide to the TRA licence rules for Airbnb hosts. If you sublet a unit you rent, check your lease first: our guide to landlord and tenant rules explains what a landlord can do.

Frequently Asked Questions

Do I pay tax on Airbnb income in Kenya?

Yes. Income from letting a property is taxable. Most single-unit hosts use Residential Rental Income Tax at 7.5% of gross rent; larger or hotel-style operations may be taxed on business profit.

What is the rental income tax rate in Kenya in 2026?

7.5% of gross rent, effective January 1, 2024, for residential rental income in KRA’s MRI band.

Can I pay Turnover Tax on Airbnb income?

No. KRA’s Turnover Tax page says TOT does not apply to rental income.

When is Airbnb rental income tax due?

Under MRI, by the 20th of the month after you receive the income.

Can I deduct Airbnb expenses?

Not under MRI, which is charged on gross rent. You can deduct allowable expenses only if you elect out of MRI or are taxed on business income in the annual return.

Do I need to file if I had no bookings?

Yes. KRA says landlords file a nil return for any month with no rent received.

Rates, thresholds, deadlines and penalties checked on October 27, 2026 on KRA’s Residential Rental Income and Turnover Tax pages (kra.go.ke).