Real estate dealers oppose increase in rental income tax  

Real estate dealers have opposed government’s proposal to increase rental income by 10 per cent. 

In the new tax proposals, government indicates it will increase rental tax from 20 to 30 per cent. 

However, real estate dealers, under the Association of Real Estate Agents Uganda, have said it was unacceptable for government to treat real estate developers as criminals. 

Speaking during a media briefing, Ms Shirley Kongai, Association of Real Estate Agents Uganda, said the proposed tax will have an impact on the real estate sector and would definitely be passed onto tenants. 

“It is as if there is something they are hiding. May be they want to squeeze some of us out. You cannot create policies that treat developers as if they are criminals,” she said, noting the tax will be a deterrent to investment in housing and will impact government’s agenda of creating a better and cheaper housing sector.   

The debate about the surge in rental tax comes at a time when Parliament is reconsidering the Landlord and Tenants Bill, 2019, which President Museveni returned for re-consideration, following his disagreement with the definition of residential premises.

The legislation also has a provision that protects tenants against sudden hike in rent, limiting an increment to 10 per cent, while a defaulting tenant can only be evicted by a landlord on the orders of court.

Ms Kongai said that instead of focusing on chocking developers through taxation, government should regulate and formalise the real estate sector value chain to create an environment that would invite more organized housing investments from which government would get more tax revenue. 

Ms Annet Babigamba, sales executive at Universal Multipurpose enterprises-a project developer said the increase was on the high side and would increase problems between tenants and landlords, noting government should instead focus on coming up with laws that protect both tenants and landlords.