Property Tax and Fees in Kampala’s Prime Neighborhoods

Investing in real estate in Kampala, Uganda is one of the most rewarding decisions you can make. Neighborhoods such as Kololo, Nakasero, Naguru, Bugolobi, Muyenga, Mbuya, Bukoto, Munyonyo, and Kigo are home to embassies, UN offices, luxury apartments, lakefront villas, and corporate offices. But beyond location and design, every property owner, landlord, or investor must understand the property tax and fees in Kampala Uganda.

At Kawe Realtors, we believe informed investors make better decisions. Here is a clear breakdown of the major taxes and fees you should expect when buying or renting property in Kampala’s prime neighborhoods.

1. Property Rates in Kampala Uganda

Property rates are charged by the Kampala Capital City Authority (KCCA) on rental and commercial properties.

• Rate: 6% of the annual rental value (after a 20% maintenance deduction).

• Who pays: Property owners renting out houses, apartments, offices, or commercial buildings.

• Exemptions: Owner-occupied homes are exempt from property rates in Kampala Uganda.

  Kololo example:
A penthouse for rent in Kololo at USD 5,500/month (~UGX 20m) generates ~UGX 240m annually. Property rate = UGX 14.4m per year.

  Naguru example:
A standalone house rented at USD 2,500/month (~UGX 9.2m) earns ~UGX 110m annually. Property rate = UGX 6.6m per year.

2. Stamp Duty in Uganda

Stamp duty in Uganda is paid to the Uganda Revenue Authority (URA) when transferring ownership or registering leases.

• Rate: 1.5% of the property value (market or declared, whichever is higher).

• Who pays: The buyer of the property.

  Nakasero example:
A house for sale in Nakasero, Kampala Uganda worth UGX 3b → Stamp duty = UGX 45m.

  Munyonyo example:
A lakefront plot in Munyonyo, Kampala Uganda valued at UGX 1.5b → Stamp duty = UGX 22.5m.

3. Rental Income Tax in Uganda

Rental income tax in Uganda applies to landlords who earn income from renting property.

• Individuals: Tax is 12%, applied after a standard 25% expense deduction. You are effectively taxed on 75% of gross rent.

• Companies: Taxed at 30% corporate rate, but they can deduct actual expenses like depreciation, management, and repairs.

💡 Kololo example:
A penthouse for rent in Kololo, Kampala Uganda earns ~UGX 240m annually.

• Deduct 25% (UGX 60m) → Taxable = UGX 180m.

• Rental income tax (12%) = UGX 21.6m per year.

💡 Bugolobi example:
A furnished apartment for rent in Bugolobi, Kampala Uganda at USD 3,000/month (~UGX 11m) earns ~UGX 132m/year.

• Deduct 25% (UGX 33m) → Taxable = UGX 99m.

• Rental income tax = UGX 11.9m per year.

4. Ground Rent in Uganda (Leasehold / Mailo Land)

Some properties in Kampala Uganda are on leasehold or Mailo tenure, which may require annual ground rent.

• Mailo tenants: Often pay nominal rent (sometimes as little as UGX 1,000).

• Leasehold: Payments depend on the lease agreement, usually for 49–99 years.

💡 Muyenga example:
A developer leasing 0.5 acres in Muyenga to build apartments pays ground rent as agreed with the landlord or the Uganda Land Commission.

5. Capital Gains Tax in Uganda

When you sell real estate in Kampala Uganda, you may be required to pay Capital Gains Tax rate in Uganda under the Income Tax Act.

• Who pays: The seller of the property.

• Basis: Capital Gains Tax rate applies on the profit (gain) from the sale — calculated as the sale price minus the purchase price and improvement costs.

• Rate: Both individuals and companies pay 30% of the gain. For companies, the gain is included in corporate income; for individuals, it is taxed directly at 30%.

• Exemptions: Transfers without profit — such as inheritance, gifts, or transfers between spouses — are not taxed in Uganda.

  Kololo example:
If a house in Kololo, Kampala Uganda was purchased at UGX 1.5 billion and later sold for UGX 2.5 billion, the gain is UGX 1 billion.

• Capital Gains Tax in Uganda = UGX 300 million (30%).

 Munyonyo example:

If a lakefront plot in Munyonyo, Kampala Uganda was acquired for UGX 800 million and later sold for UGX 1.3 billion, the gain is UGX 500 million.

• Capital Gains Tax in Uganda = UGX 150 million (30%).

Understanding property tax in Kampala Uganda is essential when buying or renting in neighborhoods like Kololo, Nakasero, Naguru, Bugolobi, Muyenga, Mbuya, Bukoto, Munyonyo, and Kigo.

For landlords, the 25% expense deduction on rental income tax in Uganda significantly reduces the tax burden, while corporate owners benefit from deducting actual expenses. Sellers should also plan for Capital Gains Tax in Uganda when making a profitable sale. Factoring these costs early helps investors maximize returns and avoid compliance issues.