RRA: Declare your immovable property tax at the moment to keep away from procrastination
Rwanda Revenue Authority (RRA) urges taxpayers chargeable for immovable property tax to declare and pay early, forward of the December 31, 2024, deadline to keep away from the inconveniences typically related to last-minute submissions.
According to the regulation figuring out the sources of income and property of decentralized entities, property tax on developed land is calculated primarily based in the marketplace worth of a constructing and the associated plot. For land with none building, the tax is levied primarily based on the floor space of the land.
The tax price is set yearly by the District Council or the City of Kigali, relying on the placement and use, however it shouldn’t exceed Frw80 per sq. meter.
Property declarations may be made by way of RRA web site (www.rra.gov.rw) go to “Declare District Revenues” and log-in along with your TIN and password. Alternatively, you dial *800# and comply with the directions. Payments may be made by way of Mobile Money (*182*3*6*reference quantity*quantity), Mobicash, or the financial institution. For unregistered land, taxpayers should first go to their nearest RRA department or name the toll-free line 3004 for additional data and help.
Ernest Karasira, the Assistant Commissioner accountable for the Provincial and Decentralized Revenue Division at RRA, said that the system for declaring immovable property tax has been open since August, encouraging taxpayers to keep away from procrastination.
“Declaring and paying early helps avoid many issues; when the system is overwhelmed with users, you might face last-minute pressures, delays, and possible penalties for missing the deadline. It’s better to act now—today—and avoid waiting until the last minute to prevent online jam and any complications,” Karasira emphasised.
He additionally offered readability on points associated to people with undeclared property within the RRA’s system. Previously, property registration was required every time land or a constructing was bought or its designated use modified. In the longer term, techniques will robotically pull immovable property particulars, making certain tax compliance.
“We are working with the Rwanda Land Management and Use Authority (RLMUA), which issues land title documents. Since taxes are based on these documents, we aim to improve our digital integration for real-time updates. For instance, when a property is transferred, it will automatically reflect in both RRA and RLMUA systems,” Karasira defined.
How property tax is calculated
The immovable property tax is assessed and paid by the proprietor, consultant, or some other particular person thought-about to be the proprietor.
The tax price on immovable property is 0.5% of the market worth of each the constructing and the associated plot of land for residential use; 0.3% of the market worth of each the constructing and the associated plot of land for business use; and 0.1% of the market worth of each the constructing and the associated plot of land for industrial use, in addition to buildings and plots belonging to micro-enterprises and small companies.
However, there are particular concerns for multi-story residential buildings to encourage environment friendly land use. A plot and constructing for residential use with three flooring are taxed on the price of 0.25% of their market worth, and 0.1% for residential use with greater than three flooring.
Property values are reassessed each 5 years. If no important adjustments affecting the worth by greater than 20% happen, the present worth stays legitimate. Similarly, if the property was bought in a free market with out notable adjustments, the acquisition value serves because the market worth.
If the taxpayer’s self-assessment of the worth of the property is believed to be undervalued, the tax administration will proceed with a counter-valuation.
The regulation imposes a 40% penalty on any taxpayer who fails to file a tax declaration on time or information a false declaration. The tax not paid on time bears an curiosity of 1.5%, calculated on a month-to-month foundation. In addition to the curiosity payable, a surcharge equal to 10% of the tax due should be paid. However, such a surcharge can’t exceed an quantity of Frw100,000.
Immovable property exempted from immovable property tax consists of one constructing meant by the proprietor to be occupied as his or her dwelling and its annex buildings situated on a residential plot for one household. That constructing is taken into account as his or her dwelling even when he/she doesn’t occupy it for varied causes, however the associated plot is taxed.
Other exempted property embody these decided by the District Council or the Council of the City of Kigali as owned by susceptible individuals; immovable property owned by the State, decentralized entities, and public establishments, besides if they’re used for profit-making actions or for leasing; immovable property belonging to overseas diplomatic missions in Rwanda if their nations don’t levy tax on immovable property of Rwanda’s diplomatic missions; and land used for agricultural, livestock, or forestry actions whose space is the same as or lower than two hectares.
Exempted are also the land reserved for the development of residential homes the place no fundamental infrastructure has been erected, and a plot of land on which a condominium is constructed or meant for the development of a condominium.
