Are you a landlord or planning to be one?  Here is what you need to know about Rental Income tax.

Rental income tax is charged on income gained from rented immovable properties (Residential houses, commercial building) located in Rwanda.

Renting is based on a contract. The rental contract in respect of immovable property is in writing and signed by the contracting parties.

How is Rental income tax calculated?

The taxable rental income is obtained by deducting from the gross rental income fifty percent (50%) considered as the expenses incurred by the property owner on maintenance and upkeep of the rented property.

Commercial building

Also When the taxpayer produces the proof of bank interest payments on a loan for the construction or purchase of a rented property, the taxable rental income is determined by deducting from gross rental income fifty percent (50%) considered as the expenses incurred for upkeep of the property plus actual bank interest paid from the beginning of the rental period within the tax period.

The remaining amount after the above deductions is the one you calculate tax rate on as follow:

1° zero percent (0 %) for an annual rental income from one Rwandan franc (FRW 1) to one hundred eighty thousand Rwandan francs (FRW 180,000)

2° twenty percent (20 %) for an annual rental income from one hundred eighty thousand and one Rwandan francs (FRW 180,001) to one million Rwandan francs (FRW 1,000,000);

Thirty percent (30 %) for an annual rental income above one million Rwandan francs (FRW 1,000,000).

The rental income tax declaration must show details of any rented immovable property located in Rwanda including the tax due assessed by a taxpayer himself/herself. Except for electronic tax declaration, the rental income tax declaration is signed by the taxpayer or his/her proxy.

Rental income tax declaration and payment are done not later than 31st January each year.