Rwanda Revenue Authority (RRA) urges taxpayers liable for immovable property tax to declare and pay early, ahead of the December 31, 2024, deadline to avoid the inconveniences often associated with last-minute submissions.

According to the law determining the sources of revenue and property of decentralised entities, property tax on developed land is calculated based on the market value of a building and the related plot. For land without any construction, the tax is levied based on the surface area of the land.

The tax rate is determined annually by the District Council or the City of Kigali, depending on the location and use, but it should not exceed Frw80 per square metre.

Property declarations can be made through RRA website (www.rra.gov.rw), go to decentralized taxes and log-in with your TIN and password. Alternatively, you dial *800 and follow the instructions. Payments can be made via Mobile Money (*182*3*6*reference number*amount), Mobicash, or the bank. For unregistered land, taxpayers must first visit their nearest RRA branch or call the toll-free line 3004 for further information and assistance.

Ernest Karasira, the Assistant Commissioner in charge of the Provincial and Decentralized Revenue Division at RRA, stated that the system for declaring immovable property tax has been open since August, encouraging taxpayers to avoid 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 also provided clarity on issues related to individuals with undeclared property in the RRA’s system. Previously, property registration was required whenever land or a building was purchased or its designated use changed. In the future, systems will automatically pull immovable property details, ensuring 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 explained.

How property tax is calculated

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

The tax rate on immovable property is 0.5% of the market value of both the building and the related plot of land for residential use; 0.3% of the market value of both the building and the related plot of land for commercial use; and 0.1% of the market value of both the building and the related plot of land for industrial use, as well as buildings and plots belonging to micro-enterprises and small businesses.

However, there are special considerations for multi-story residential buildings to encourage efficient land use. A plot and building for residential use with three floors are taxed at the rate of 0.25% of their market value, and 0.1% for residential use with more than three floors.

Property values are reassessed every five years. If no significant changes affecting the value by more than 20% occur, the current value remains valid. Similarly, if the property was purchased in a free market without notable changes, the purchase price serves as the market value.

If the taxpayer’s self-assessment of the value of the property is believed to be undervalued, the tax administration will proceed with a counter-valuation.

The law imposes a 40% penalty on any taxpayer who fails to file a tax declaration on time or files a false declaration. The tax not paid on time bears an interest of 1.5%, calculated on a monthly basis. In addition to the interest payable, a surcharge equivalent to 10% of the tax due must be paid. However, such a surcharge cannot exceed an amount of Frw100,000.

Immovable property exempted from immovable property tax includes one building intended by the owner to be occupied as his or her dwelling and its annex buildings located on a residential plot for one family. That building is considered as his or her dwelling even when he/she does not occupy it for various reasons, but the related plot is taxed.

Other exempted property include those determined by the District Council or the Council of the City of Kigali as owned by vulnerable persons; immovable property owned by the State, decentralized entities, and public institutions, except if they are used for profit-making activities or for leasing; immovable property belonging to foreign diplomatic missions in Rwanda if their countries do not levy tax on immovable property of Rwanda’s diplomatic missions; and land used for agricultural, livestock, or forestry activities whose area is equal to or less than two hectares.

Exempted also are the land reserved for the construction of residential houses where no basic infrastructure has been erected, and a plot of land on which a condominium is built or intended for the construction of a condominium.