7 June 2017

Uganda: Row Over Assessment Tool Mars Kampala Property Review

Photo: The East African
Bird's eye view of Kampala City, Uganda. All buildings in Kampala will be listed to ease revenue collection.

A property tax review by the Kampala Capital City Authority has triggered protests by property owners.

Many claim that the authority failed to capture multiple ownership deeds attached to one property and, therefore, arrived at wrong valuation assessments.

The city commissioned the exercise in a bid to increase revenues. Local governments are obliged to undertake property tax reviews every five years, the last one having been done in 2009.

Private residential houses and unoccupied buildings gazetted by the City Authority are exempted from property taxes. An estimated 15,190 properties were covered during the review exercise that commenced last year in the City's largest commercial property zone, according to senior executives at the Kampala Capital City Authority (KCCA).

Central Division accounts for roughly 50 per cent of the City's property tax revenues every year. So far, 582 disputes have been lodged with KCCA and are to be handled by the City's Valuation Court, which started operations last month. Of these, 340 disputes are attributed to valuation grievances while 40 are on multiple ownership.

About 180 cases arose from typographical errors in property owners' names and addresses, KCCA data shows.

A case filed in the Valuation Court is supposed to be heard and disposed of in 15 days, according to its rules of procedure.

The property tax review for Nakawa Municipality is ongoing while Rubaga, Makindye and Kawempe are yet to be covered.

Though some old properties located in the City are usually linked to a single proprietor, recent changes in ownership anchored in condominium laws have given way to multiple titles of ownership issued against one property.

However, some of those properties were apparently captured as sole ownerships and issued a single property tax assessment liability by KCCA, which aggrieved landlords claimed led to unfair and excessive taxation.

For instance, Fami House, formerly known as Colline House, one of the oldest commercial office properties in uptown Kampala reportedly received a new property tax liability assessment issued to its pioneer owner but has since changed to a condominium arrangement that involves more than three owners, The EastAfrican has learnt.

Some landlords feel the capital value approach, which is popular in Kenya, offers a more reliable way of calculating property taxes but others think the earnings approach gives lower property tax values if used accurately.

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