Rwanda Scraps Fee on Land Transfer By Sale

29 November 2023

Residents are no longer charged a fee on sale-based land transfer for any plot with up to Rwf5 million value, after the government of Rwanda scrapped the charge on title service, The New Times has learnt.

The Ag Director General of the National Land Authority (NLA), Marie-Grace Nishimwe, told The New Times that the decision to remove land transfer fee by sale started being implemented on November 8.

However, she said that a decision on what will be charged or not on other services including land transfer by donation, and succession, is awaiting a relevant order that is pending approval - pointing out that a flat fee of Rwf30,000 is still charged on such services.

The development follows concerns from the general public, and Members of Parliament (MPs), on a flat fee of Rwf30,000 that was being charged on a land transfer (by sale), regardless of the value, size, and location of the plot in question.

On many occasions, MPs said that the practice was not fair, as, for instance, residents had to pay the same charge on title transfer for low-value plots in rural areas as those who have expensive plots in urban areas, and urged a review of the fee.

Nishimwe said that land sale is provided for in the new property tax law, which provides that a plot bought at a price not exceeding Rwf5 million is not taxed, while that bought at more than Rwf5 million pays between 2 per cent and 2.5 per cent tax.

The law determining the sources of revenue and property of decentralised entities, which was published in the official gazette n° Special of 14/09/2023, established a tax on the sale of immovable property, including land.

According to the law, a rate of 2 per cent is levied on the sale value of an immovable property for commercial use if the seller is a taxpayer registered for income tax; while a rate of 2.5 per cent is levied on the sale value of an immovable property sold by a person not registered for income tax.

It stipulates that the tax is levied on the balance of the sale value of the property after a deduction of Rwf5 million which is not taxable.

Commenting on why the aforementioned fee was removed, Nishimwe said residents requested for that saying it was exorbitant for those in rural areas, who could sell a piece of land as low as Rwf50,000.

For every resident to access a good and quick service, Nishimwe said, the government listened to the concern and decided that land purchased at a small amount of money would not pay a fee nor tax, while that bought at a relatively larger amount of money would be taxed based on the value, instead of the flat fee.

"This implies that residents who had bought land but were unable to register [to get title transfer] because they realised the fee was high, are now having it registered. They will have land ownership security because they will possess titles," Nishimwe observed.

She indicated that the development will address the issue of informal land transactions that were caused by the fee that some residents considered high as they could not afford it.

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