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Ugandan Government to Review Property Tax Rates, Says Lands Minister

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ugandan government to review property tax rates says lands minister
ugandan government to review property tax rates says lands minister
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Highlights:

  • Government Considers Property Tax Rate Revision
  • Lands Minister Highlights Plans for Property Tax Rate Overhaul
  • Property Tax Rate Reform on the Horizon, Announces Minister

The government is planning to make changes to the property tax rates, as stated by Minister Judith Nabakooba, the Minister of Lands Housing and Urban Development. She mentioned this during her speech at the second Uganda Housing symposium organized by Habitat for Humanity in Kampala. The aim is to revise the current rates, which are considered unfriendly and unaffordable for many property owners.

The property rate tax, which property owners within a local government jurisdiction are required to pay, is determined based on the rateable value assessed by an approved valuation surveyor according to Ugandan laws. These property rates contribute significantly to the tax revenue of local governments.

Nabakooba disclosed that presently, the government collects less than 40 percent of this tax due to property owners avoiding it because of the high rates.

To address this issue, the Ministry of Lands Housing and Urban Development is in discussions with the Uganda Revenue Authority (URA), the Ministry of Finance, and the Kampala Capital City Authority (KCCA) to ensure that the revised rates become more favorable for property owners.

According to the Local Government Act, local governments can impose a tax rate not exceeding 12 percent of the taxable value of the property, with a minimum of 2,000 shillings. The taxable value is calculated as 74 percent of the revenue generated by the property.

In 2020, KCCA modified these rates in Kampala from 6 percent of the taxable value for commercial properties to 4 percent for properties generating five million shillings or less, and 6 percent for properties generating over five million shillings. However, many property owners in Kampala still find the charges to be high.

During the Housing symposium, Minister Nabakooba emphasized the importance of effective policies prioritizing investment in the housing sector, technological advancements, and resource allocation for responsive housing development.

Anthony Steven Okoth, the National Director of Habitat for Humanity Kenya, urged Uganda to formulate policies aimed at providing affordable housing to bridge the housing gap and to address youth unemployment by involving the private sector in managing the housing deficit issue.

The housing symposium centered around the theme “Affordable Housing for Urban Informal Settlements as a Driver for Economic Growth.”