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The rental property tax in Uganda and how it affects landlords

What is rental income?

According to the Uganda Revenue Authority (URA), rental income is defined as the total amount of rent derived by a person for the year of income from the lease of immovable property in Uganda with the deduction of any expenditures and losses incurred in respect of the property. URA describes immovable property to be land rented for a washing bay, customs bond, selling sand or gravel and or buildings such as a house, flat, apartment or office. This tax affects you if you own ‘rentals’ in Uganda that return more than 3m Uganda shillings.

Who pays rental income?

Any individual who earns rental income in excess of Shs2, 820,000 a year from immovable property.

How is rental income calculated?

First, URA says that rental income is isolated from business income and for that matter it is taxed separately. It is charged for each year of income and is imposed on every person who has rental income.

The rental income of a resident individual for a year of income is charged to income tax at 20 per cent of the chargeable income excess of Shs2, 820,000 while the rental income of a company for a year of income is charged to income tax at 30 per cent.

Thursday, December 7th, 2017