1. How Do You Register a Short-Term Rental in Kenya?
Currently, Kenya lacks a unified legal framework for the registration of short-term rentals. This is largely because the concept is relatively new, driven by the rise of online platforms like Airbnb and Booking.com. Even in more regulated markets like the UK, formal registration and licensing for such rentals have only recently gained traction.
In Kenyan law, short-term rentals don’t neatly fall under the traditional concept of a “lease,” which is more commonly recognized. Instead, these arrangements are considered licenses — meaning they only create personal rights between the host and the guest, without giving the guest any legal interest in the property. Consequently, such licenses are not registrable under the Land Registration Act, 2012, and are not handled by the Land Registries.
However, from a tax perspective, anyone operating a short-term rental business must:
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Register with the Kenya Revenue Authority (KRA) and obtain a Personal Identification Number (PIN).
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File tax returns and pay income tax on earnings from the rental.
Additionally, under the Tourism Act, anyone offering services listed in the Ninth Schedule — including serviced apartments, villas, guest houses, and homestays — must obtain a license from the Tourism Regulatory Authority (TRA).
2. What Taxes and Levies Apply to Short-Term Rentals?
If you’re earning income from short-term rentals, several taxes and levies may apply:
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Income Tax: Rental income is taxed at rates ranging from 10% to 30%, depending on your income bracket.
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VAT: If your annual turnover exceeds KES 5 million, you’re required to register for Value Added Tax (VAT) and charge it on taxable supplies.
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Tourism Levy: If you’re licensed under the Tourism Act, you must remit 2% of your gross monthly sales (from food, drinks, accommodation, and related services) to the Kenya Tourism Board.
3. How Compliant Are Hosts in Kenya?
Compliance remains low. Many property owners and hosts do not register for tax purposes or obtain the necessary licenses from the Tourism Regulatory Authority.
This low compliance is largely due to the absence of a clear and mandatory regulatory framework. As a result, most short-term rental operations remain in the informal sector, which makes enforcement and regulation difficult.
For example, while the Tourism Act requires licensing for operators of serviced flats and cottages, it’s unclear whether renting out a room or an entire apartment for a few nights qualifies as a “homestay” or “guest house” under the law. This ambiguity contributes to the compliance gap.
4. What Happens If You Advertise a Property Using Airbnb’s Logo Without Being Registered?
Using Airbnb’s or Booking.com’s logo or name to market your property without an official partnership is illegal.
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Trademark Infringement: Kenya’s intellectual property laws protect brand names and logos. Unauthorized use can lead to trademark infringement lawsuits, which can be costly.
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Consumer Protection Violations: Misleading the public by implying an affiliation with these platforms when none exists is an unfair trade practice under the Consumer Protection Act. If convicted, violators risk a fine of up to KES 1,000,000 and/or a prison sentence of up to 3 years.
Conclusion
While short-term rentals offer lucrative opportunities for property owners in Kenya, the legal and regulatory landscape remains murky. Until a clear framework is introduced, operators must be cautious and stay compliant with existing tax and tourism laws to avoid penalties.