The law states that owners of more than one residential house are subject to property tax. The sources of revenue and property of decentralized entities, commonly known as property taxes are calculated based on the value of the property, the location, the access to public services in the area the property is located in, or the purpose the property will serve for.
Previous studies indicated that top urban land tax bracket of Frw 80/square meters was very low compared to the real market values.
On January 10th, 2019, the cabinet approved the increase on tax for properties located in the City of Kigali and other developed cities across Rwanda especially in commercial suburbs. Owners of said properties were subjected to a higher tax rate compared to property owners in underdeveloped areas.
Properties located in the City of Kigali in commercial areas and which have access to public services will pay a property tax between Rwf 250 and Rwf 300 per square meter for a period of one year. Properties located in the City of Kigali but with no access to public infrastructures and services will be subject to Rwf 125 to Rwf 150 rate per square meter for a period of one year.
Properties located in residential, tourism and entertainment areas in Kigali will pay Rwf 200 to Rwf 250 per square meter whereas properties located in undeveloped plots of Kigali will attract taxes ranging from Rwf 100 to Rwf 150 per square meter.
The 2018 draft for the progressive tax regime which targets residential and commercial properties reads that “It will contribute to the mobilization of the resources needed to provide the basic infrastructure for economic growth and efficient services delivery.”
For cities surrounding Kigali including Muhanga, Rubavu, Musanze, Huye, Nyagatare, Karongi, Rusizi, Bugesera, Kamonyi, and Rwamagana, the property tax law states that owners will pay Rwf 100 to Rwf 140 per square meter for properties located in commercial and industrial areas and Rwf 50 to Rwf 100 per square meter in one year for properties located in touristic and entertainment hubs.
Another category includes underdeveloped cities such as Nyabihu, Gicumbi, Rulindo, Kayonza, Ngoma, Kirehe, Gatsibo, Ruhango, Nyanza, Burera, Ngororero, Gakenke, Nyaruguru, Gisagara, Nyamagabe, Rutsiro, and Nyamasheke.
In the aforementioned cities, owners will pay Rwf 8 to Rwf 15 per square meter per year for properties located in commercial and industrial areas while properties located in agricultural and cattle rearing areas will be charged Rwf 2 to Rwf 10 per square meter.
The new property taxes are expected to hugely boost domestic revenue which was estimated at 9.137 billion USD in 2017.