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Rwanda’s strategic moves to ease immovable property tax burden

By Esther Muhozi
On 11 January 2024 at 10:13

The Ministry of Finance and Economic Planning has unveiled a significant reduction in immovable property taxes, particularly for residential houses, consolidating rates with those of built-up land. The adjustments, stemming from amendments to the law governing local authorities’ finance and property, primarily target taxes on immovable properties, including both land and houses.

According to the revised law, the land tax has been scaled down from 0 to 80 Rwandan Francs per square meter, compared to the previous range of 0 to 300 Rwandan Francs per square meter. This translates to the highest tax rate not exceeding Rwf80 per square meter, a substantial reduction from the previous Rwf300. The tax rates exhibit a gradient, with higher rates in the City of Kigali gradually decreasing towards rural areas.

Under the new legislation, the tax on residential houses has been halved, transitioning from 1% to 0.5% of the house’s value. Moreover, the tax on both houses and land has been amalgamated into a unified tax structure, as highlighted by Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning, in an interview with RBA.

Dr. Ndagijimana explained, "We unified the tax on the house and land, where previously, individuals paid 1% of the house’s value and a land tax ranging from zero to 300 depending on the location. Now, there is a single tax of 0.5% on the combined value of the house and land."

He clarified that individuals with multiple houses can choose one for tax exemption, although the land associated with it will continue to be taxed.

In addition to these changes, the government has eliminated fees for various processes, including land transfers, land ownership certificates, and land registration certificates. Fees for building repair, renovation, fence construction, and building permits in rural areas have also been removed.

Minister of Local Government, Jean Claude Musabyimana underscored additional modifications, clarifying that fees for various supplementary documents, including birth and death certificates, have been abolished. Similarly, permits for activities such as burning charcoal, manufacturing bricks and tiles, and forest harvesting are no longer subject to charges. Despite these services being exempt from fees, applicants are still required to formally initiate requests for them.

The adjustments to land taxes and associated fees address longstanding controversies, with claims of excessive taxation prompting calls for reductions. The government’s move aims to create a more balanced and favorable taxation framework for property owners across the country.

The Ministry of Finance and Economic Planning has unveiled a significant reduction in immovable property taxes, particularly for residential houses, consolidating rates with those of built-up land.

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