Land tax, property tax and transfer costs: immovable property tax under Law N° 048/2023, land tax bands of RWF 0 to 80 per square metre, rates of 0.1% to 0.5% of market value, exemptions, five-year valuation cycles, the 2% and 2.5% tax on sale of immovable property, rental income tax, VAT and capital gains

From lease fees to land tax: the current framework

Article 48 of Law N° 27/2021 of 10/06/2021 governing land obliges every holder of land rights "to pay land tax and fees in accordance with relevant laws". Older guides, and some investor FAQs, still describe an annual lease fee paid to the State on emphyteutic leases. No current instrument imposing a separate annual lease fee has been identified; the recurrent charge on land is the immovable property tax under Law N° 048/2023 of 05/09/2023 determining the sources of revenue and property of decentralized entities, which came into force on its publication in the Official Gazette n° Special of 14/09/2023 and repealed Law n° 75/2018 of 07/09/2018. The May 2025 national tax package did not amend it.

Property tax, rental income tax and trading licence tax are revenues of the Districts and the City of Kigali (Article 5), but the Rwanda Revenue Authority (RRA) assesses and collects them as the tax administration for decentralised entities. Declarations are filed and assessments issued through RRA's Rwanda Automated Local Government Taxes Management System, and payment can be made by mobile money, internet banking and similar channels. Fees for local services, such as building permits, are set separately by Presidential Order N° 075/01 of 04/12/2023, under Article 48 of Law N° 048/2023.

Who pays, and on what base

The tax is assessed and paid by the owner, the usufructuary or any other person considered to be the owner (Article 6). Persons considered owners include a holder whose title deed has not yet been transferred into his or her name, a person who has occupied the property as owner for at least two years where the legal owner is unknown, the proxy of an owner who lives abroad, a usufructuary and the administrator of abandoned property (Article 9). An owner living abroad may appoint a proxy in Rwanda, who must fulfil the owner's tax obligations (Article 6(2)). Co-owners appoint a representative (Article 8). On a transfer during the year, the acquirer is liable from the date of the transfer, while the former owner remains liable for fines and interest on its own defaults (Article 10).

Article 11 sets four bases: the market value of a building and its related plot; the surface of land designated for construction but not built on; the surface of land not designated for residential use; and the surface of a plot carrying a building that is itself exempt. Where a property consists of a plot and a building, both taxable, the tax is calculated on the market value of both together (Article 11(2)), so a built commercial or residential property pays a percentage of value, while vacant building land, and the plot under an exempt family home, pay the land tax per square metre.

The rates on buildings

Article 16 sets the rates on the market value of building and plot: 0.5% for residential use, 0.3% for commercial use and 0.1% for industrial use and for buildings and plots belonging to micro-enterprises and small businesses. A micro-enterprise has turnover of RWF 12,000,000 or less per tax period and a small business between RWF 12,000,001 and RWF 20,000,000 (Article 2). A residential plot and building "of three floors" is taxed at 0.25% and one with more than three floors at 0.1%, to encourage density. Machinery and equipment attached to a commercial or industrial building are excluded from its taxable value.

Two definitions matter in practice. A commercial or industrial building is one the competent authority authorised for that purpose and for which it issued the occupancy permit, and a residential building is one that has reached a level allowing occupation (Article 2). The text speaks of residential buildings "of three floors"; an RRA summary of 2023 described the band as buildings that "do not exceed three floors". On the Gazette wording, one- and two-storey houses that are not the owner's exempt dwelling are taxed at 0.5%; owners of such houses should confirm RRA's current treatment before filing.

Land tax per square metre and Kigali's 2025 increase

The land rate is RWF 0 to 80 per square metre (Article 16(1)(a)). Ministerial Order N° 002/23/10/TC of 24/11/2023 determining standard rates and other criteria applied to set the tax rate per square meter of the surface of land, which replaced Ministerial Order N° 001/20/10/TC of 10/01/2020, sets bands by class of city, level of development and land use, and the District Council or the Council of the City of Kigali fixes the actual rate within the band, considering the class of city, the level of development and the intended use (Articles 2 and 3). The bands run from RWF 70 to 80 for commercial, industrial and open-space land in Kigali's central business district (CBD) to RWF 0 to 0.4 for agricultural and livestock land wherever that use is listed.

The City of Kigali Council raised its rates in February 2025, moving many plots to the RWF 80 ceiling; one reported Kicukiro plot rose from RWF 10 to RWF 80 per square metre, and the City publicly explained the change on 5 January 2026. Because the bands depend on zoning, a rezoning under a new master plan can move a plot into a higher band, and investors holding land banks in Kigali should model the tax at the ceiling of the applicable band.

Exemptions

Article 12 exempts: one building the owner intends to occupy as the family dwelling, with its annexes on a one-family residential plot, which stays exempt even if the owner is absent; property of persons the Council determines to be vulnerable; property of the State, decentralised entities and public institutions, except where used for profit or leased; property of foreign diplomatic missions on reciprocity; land used for agriculture, livestock or forestry of 2 hectares or less; land reserved for residential construction where no basic infrastructure has been provided, water, road and electricity being the elements that must be present (Article 2(d)); and the plot on which a condominium is built. Each separately owned condominium unit that is its owner's only family dwelling is exempt, and the common parts are wholly exempt.

Companies rarely benefit from the dwelling exemption, so a company that owns staff housing pays 0.5% on it. Agricultural holdings above 2 hectares pay land tax, although at the RWF 0 to 0.4 band the cost is small. Developers of specialised industrial and innovation parks registered under Law N° 006/2021 of 05/02/2021 on Investment Promotion and Facilitation may obtain a five-year property tax exemption and an exemption from land transfer fees where land is transferred in exchange for shares; the conditions are in Investment incentives (FAQ 39).

Valuation, declaration and payment

Property is valued at market value for five-year assessment cycles (Article 13). On the text of Article 2(g), the first cycle under Law N° 048/2023 began on 1 January 2024, so a general revaluation is due at the start of the next cycle on 1 January 2029; market movements in between do not trigger reassessment, but a change in the property of more than 20% must be declared within one month (Article 19). Under Article 14, a valuation or a free-market purchase price from the previous five years stands as market value if the buildings have not changed value by more than 20%; if RRA considers a self-assessment too low it may counter-value, and its figure prevails if the difference exceeds 20%. Valuation is by a certified valuer, paid by whoever commissions it, or by computerised mass valuation; until those are effective, acquisition and construction cost remain acceptable (Article 15).

The owner declares by 31 December of the first tax period and again by 31 December of the last year of each cycle (Article 18), and pays by 31 December each year; absent a revision or assessment, the same amount is paid for five consecutive years (Article 22). RRA reviews declarations within six months from 1 January of the following year (Article 20). A taxpayer may apply for deferral at least 60 days before the due date; RRA must answer at least 30 days before it or the request is deemed accepted, and deferral of up to six months, payable in up to six instalments, carries interest but no fine (Articles 24 and 25). Late payment bears interest of 1.5% a month, non-compounding, with every month started counting in full, plus a surcharge of 10% capped at RWF 100,000; a late or false declaration attracts a penalty of 40% of the tax (Article 51). RRA's audit right lapses after five years, or ten in cases of evasion (Article 54).

Transfer costs: the tax on sale and the fees

Article 17 of Law N° 048/2023 levies a tax on sale of immovable property at 2% of the sale value of property for commercial use where the seller is registered for income tax, and at 2.5% of the sale value of immovable property sold by a person not registered for income tax. The first RWF 5,000,000 of the sale value is not taxed, the 2% tax is a deductible expense for the registered seller, and the tax is not levied on the price fixed once an auction has begun. It is declared through the Local Government Taxes system. Because the rates turn on the seller's status, the tax is the seller's in practice, but the contract should say who bears it. The text does not on its face tax a sale of residential property by a seller registered for income tax; that gap should be confirmed with RRA rather than assumed.

Registration costs are modest. The service of transfer of ownership of immovable property and the certificate of land registration are exempt from fees (Article 26 of Presidential Order N° 075/01 of 04/12/2023); a public notary charges RWF 500 per page of contract and, according to the National Land Authority, a private land notary RWF 6,500 per copy. Older figures such as a RWF 20,000 transfer fee and a RWF 60,000 surveyor fee, still shown on RDB's business procedures portal with references to instruments of 2005 to 2010, are out of date. The procedure is in Land registration, titles and due diligence.

Income tax, capital gains and VAT on real estate

Rental income. Individuals and other persons not subject to corporate income tax pay rental income tax on rent from immovable property in Rwanda (Article 39): 0% on annual rental income up to RWF 180,000, 20% from RWF 180,001 to RWF 1,000,000 and 30% above, after deducting 50% of gross rent as deemed upkeep and, with proof, the actual bank interest on a loan to build or buy the property (Articles 42 and 43). The return and payment are due by 31 January of the following year, and every rental contract must be in writing with a copy lodged with the tax administration within 15 days of signature (Articles 41, 44 and 46). A company landlord pays corporate income tax at 28% on its rental profit instead, under Law N° 027/2022 of 20/10/2022 establishing taxes on income, as amended.

Gains. A company's gain on selling property forms part of its taxable business profit. Since 29 May 2025, capital gains tax on direct and indirect transfers of shares is 10% under Law N° 014/2025 of 27/05/2025 amending the income tax law, so selling the company that holds land rather than the land itself changes, but does not remove, the tax cost. Registered investors' exemption from capital gains tax under the Investment Code does not extend to income from selling commercial immovable property (FAQ 25). VAT. Under Law N° 049/2023 of 05/09/2023 establishing value added tax, as amended by Law N° 009/2025 of 27/05/2025, the sale or lease of land, the sale of residential buildings and residential lettings of more than 90 days are exempt; sales and lettings of commercial buildings are not on the exempt list, so a VAT-registered seller or landlord charges VAT at 18%. The detail is in Capital gains, property and other taxes and VAT and electronic invoicing.

The annual property tax cycle for an investor

1. Classify each propertyFor each UPI, record the use (residential, commercial, industrial, agricultural), the floors, whether an occupancy permit exists, and whether any exemption under Article 12 applies.
2. Value itUse a purchase price or certified valuation from the last five years, if the buildings have not changed value by more than 20%; otherwise commission a certified valuer. Keep the contract or certificate for RRA.
3. DeclareFile the declaration on the Local Government Taxes system by 31 December of the first year of the cycle, and again by 31 December of the cycle's last year. Declare any change of more than 20% within one month.
4. Pay by 31 DecemberPay each year by 31 December through mobile money, internet banking or another accepted channel. If cash is short, apply for deferral at least 60 days before the due date.
5. Check the assessmentRRA reviews declarations within six months from 1 January of the following year and may counter-value; contest any assessment through the tax administration's appeal procedure.
6. On a sale or purchaseThe seller declares the tax on sale of immovable property; the buyer becomes liable for property tax from the transfer date and should apportion the year in the contract.