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Property owners risk losing their investments over rates in Rwanda

Wednesday January 13 2021
Land

New land rates have sent shivers down the spine of property owners in urban centres across the country. PICTURE | CYRIL NDEGEYA

By JOHNSON KANAMUGIRE

Landowners in urban areas risk losing their property to the government for failing to pay land rates that have accumulated over the years.

The situation is worse for many city landowners with undeveloped land parcels who have been slapped with a 200 percent punitive tax, as well as parcels exceeding the standard size for construction that attracts an additional 50 percent tariff.

The controversial tax provision, which took effect this year, has equally caused uproar among landowners in town centres across the country where districts adjusted rates to between Rwf80 and Rwf300 per square metre from a maximum of Rwf80 per square metre previously.

Details of the Kigali City advisory council latest resolution published on December 18, show property tax rates more than doubled to between Rwf200 and Rwf220 per square metre in most high-end residential neighbourhoods and others in the Central Business Districts (CBD) such as Rusororo, Kibagabaga, Kimihurura, Kiyovu, Nyarutarama and parts of Kacyiru, Niboye, Nyakabanda, Kanombe, Kabeza and Remera.

Elsewhere in the city, rates range between Rwf80 and Rwf120 per square metre. For instance, a resident in Nyagahinga Village of Rusororo in Gasabo district who has been paying Rwf51,400 per annum for his 854 square metre undeveloped plot of residential land now has to pay up to Rwf440,000 under the new property law that saw rates shoot to Rwf200 per square metre.

“The charges are really too high, I don’t even want to think about it. It is apparent that the intention is to create a city of only rich people as everyone else could be auctioned for failing to pay the dues arising from accumulating taxes and penalties,” he told Rwanda Today.

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Many landowners in Kigali, secondary cities and upcountry townships who paid low rates now have to pay more land and home taxes under the new provisions, with charges doubling for plots that are not developed, as well as penalties in case of late payment.

The new provisions threaten tenure security for those acquiring property through inheritance, and low-income land buyers seeking to settle in the city if they have no financial muscle to regularly pay or use land as per the masterplan.

“The risk is that the government will confiscate the property if you fail to pay both the land and property tax, and you will be auctioned. That’s the law,” argued Frank Habineza, an MP who attempted to overturn the legislation without success.

“It is very worrying especially for people in rural townships like Nyagatare, Kayonza, Rwamagana, Musanze and others that used to be in the agriculture domain and are now registered as residential. The tax is higher than the value of the land in some cases.”

Mr Habineza, who had insisted that land rates should not exceed a maximum of Rwf100 per square metre, called for an oversight authority to ensure rates decided by individual districts in the name maximising own revenues are not out of reach for the ordinary people.

The new taxes are expected to increase the cost of living as landlords pass on the cost to tenants through rent charges.

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