The Finance Act 2026 Explained: What It Means for Kenya's Property Market

The Finance Act 2026 is now in force.
Real estate is one of the many sectors that will feel the effects.
Removing Capital Gains Tax on qualifying transfers lowers one of those barriers.
The Finance Act 2026 isn’t a housing policy, but it is a reminder that tax policy and real estate are closely linked.

The Finance Act 2026 is now in force, and while most people associate it with taxes, its impact goes much further than that.

Real estate is one of the many sectors that will feel the effects. Whether you’re building, buying, selling, investing or simply looking for your next home, some of the changes introduced this year are worth paying attention to.

So, what has actually changed, and what does it mean for Kenya’s property market?

Table of Contents

1. More Incentives for Real Estate Investment Trusts (REITs)

One of the biggest wins for the property sector is aimed at Real Estate Investment Trusts, commonly known as REITs.

The Finance Act exempts capital gains arising from the transfer of property into a registered REIT from Capital Gains Tax.

The Act also amends the Stamp Duty Act so that transfers of beneficial interests in property into a REIT can qualify under the relevant stamp duty provisions.

What does this mean?

For many years, REITs have been viewed as an important way of attracting institutional investment into Kenya’s property market. However, transaction costs have often made it expensive for developers and property owners to move assets into these investment structures.

Removing Capital Gains Tax on qualifying transfers lowers one of those barriers.

It may not change the market overnight, but it could encourage more developers and institutional investors to consider REITs when financing or managing large commercial and residential developments.

2. New Tax Rules for Non-Resident Landlords

Another notable change affects property owners who live outside Kenya but earn rental income from property located here.

The Finance Act introduces a Non-Resident Rental Income Tax, creating a specific tax regime for rental income earned by non-residents from property situated in Kenya. The tax is final, and affected property owners will be required to register, file monthly returns and pay the tax through a simplified framework prescribed by KRA.

What does this mean?

If you’re a Kenyan resident earning rental income locally, this provision does not directly affect you.

However, for foreign investors and Kenyans living abroad who own rental property in Kenya, compliance requirements become much clearer and more structured.

From the government’s perspective, the move is expected to improve tax administration and ensure rental income earned within Kenya is properly accounted for.

3. Affordable Housing Levy Remains, But Administration Changes

The Finance Act also makes a small amendment to the Affordable Housing Act.

Rather than changing how much employees or employers contribute, the amendment focuses on how levy collections are administered, allowing up to 2% of the funds collected to be used for collection costs, subject to approval by the Cabinet Secretary.

What does this mean?

For most Kenyans, nothing changes in terms of contributions.

The amendment is administrative rather than financial, but it reflects the government’s continued commitment to implementing the Affordable Housing Programme.

So… Will House Prices Change?

Probably not immediately.

The Finance Act doesn’t suddenly make houses cheaper or more expensive.

Property prices are still influenced by bigger factors such as interest rates, construction costs, infrastructure development, land availability and demand.

What tax policy does is shape the environment in which developers and investors make decisions.

When taxes are reduced on investment structures like REITs, institutional investment can become more attractive. When compliance rules change for landlords or investors, the market adapts accordingly.

These aren’t changes that buyers will necessarily notice tomorrow, but they could influence how Kenya’s property market evolves over the coming years.

Conclusion

The Finance Act 2026 isn’t a housing policy, but it is a reminder that tax policy and real estate are closely linked.

This year’s changes focus less on homebuyers and more on improving investment structures, strengthening tax administration and supporting the broader property investment ecosystem.

For developers, investors and property professionals, they’re worth paying attention to. While the impact may not be immediate, these reforms could help shape how capital flows into Kenya’s real estate market and how property investments are structured in the years ahead.