Immovable Property Tax

Legal reference:

The Immovable Property Tax is governed by Law No. 048/2023 of 05/09/2023 determining the source of revenue and property of decentralized entities.

Who has to pay?

1.The immovable property tax is assessed and paid by the owner, the usufructuary or any other person considered to be the owner.

2.The owner who lives abroad can have a proxy in Rwanda. Such a proxy must fulfil the tax liability that this Law requires from the owner. Misrepresentation is considered as if it is done by the owner.

3. The tax liability on immovable property is not terminated or deferred if the owner of immovable property has disappeared without leaving behind a proxy or other person to manage the immovable property on his or her behalf.

Immovable Property Tax base

The immovable property tax is levied basing on the following:

a) the market value of a building and related plot;

b) the surface of land designated for construction but without any construction;

c) the surface of land not designated for residential use;

d) the surface of a plot of land with a building exempted from immovable property tax.

However, if the immovable property consists of a plot of land, a building and its improvements, the tax on immovable property is calculated on the market value of both the building and the related plot of land if the two are subject to tax. 

Immovable property exempted from immovable property tax

The following immovable properties are exempted from the immovable property tax:

(1) One building intended by the owner to be occupied as his or her dwelling and its annex buildings located in a residential plot for one family. That building remains considered as his or her dwelling even when he/she does not occupy it for various reasons;

(2) Immovable property determined by the district Council or the Council of the City of Kigali as owned by vulnerable persons;

(3) Immovable property owned by the State, decentralised entities and public institutions, except if they are used for profit-making activities or for leasing;

(4) Immovable property belonging to foreign diplomatic missions in Rwanda if their countries do not levy tax on immovable property of Rwanda’s diplomatic missions;

(5) Land used for agricultural, livestock or forestry activities whose area is equal to or less than two hectares;

(6) Land reserved for construction of residential houses but where no basic infrastructure has been erected;

(7) Plot of land on which a condominium is built or meant for construction of a condominium.

The exemption referred to under Paragraph (1) equally applies to each individually owned portion of a condominium if the portion is the only family dwelling.

However, commonly owned portions of the building are totally exempted from the tax.

Tax rate on immovable property

The tax rate on immovable property is determined as follows:

a) zero to FRW 80 per square meter of the surface of land;

b) 0.5% of the market value of both the building and related plot of land for residential use;

c) 0.3% of the market value of both building and related plot of land for commercial use;

d) 0.1% of the market value of both the building and related plot of land for industrial use, building and plot belonging to micro-enterprises and small business.

However, special consideration is given to the following:

a) a plot and a building for residential use of three floors are taxed at the rate of 0.25% of their market value;

b) a plot and a building for residential use with more than three floors are taxed at the rate of 0.1% of their market value;

c) in determining the taxable value of a commercial or industrial building, machinery and other equipment attached to the building are not considered.

The Ministerial Order no 002/23/10/TC of 24/11/2023 determines the standard rates and other criteria applied to set the tax rate per square meter of the surface of land.

Tax declaration on immovable property by the taxpayer

 1) Not later than 31st December of the year that corresponds to the first tax period, the taxpayer files to the tax administration his/her declaration of the immovable property tax.

2) A new declaration of immovable property tax is filed by not later than 31st December of the last year of each tax assessment cycle.

Time and cycle for payment of tax on immovable property

1) The tax on immovable property is paid to the tax administration not later than 31 December of the year that corresponds to the tax period.

2) Subject to the provisions of Articles 16 and 17 of this Law, as long as there is no general revision of taxes or tax assessment notice issued by the Tax Administration, the same amount of tax on immovable property is paid annually by the taxpayer for five consecutive tax periods.