I setup the following in my app's build.gradle file:

apply plugin: 'kotlin-android'
apply plugin: 'kotlin-kapt'
dependencies {
  kapt "com.google.dagger:dagger-compiler:2.1"
  kapt "com.android.databinding:compiler:$androidGradlePluginVersion"
  kapt "me.tatarka:gradle-retrolambda:3.6.0"
}
kapt {
  generateStubs = true
}

mattinger: try removing

apply plugin: 'kotlin-kapt'

@trevjones doing that stops the databinding compiler from running altogether, so java files don't compile either.

first of all remove

kapt {
  generateStubs = true
}

it's not needed for kapt 3 AFAIK kotlin does not work with retrolambda

i agree kotlin does not need retrolambda, but my java code needs it. It seems that i was actually chasing a ghost.