UGANDA, Hoima | Real Muloodi News | Commercial property owners in Hoima City have until August 10 to view, and if applicable object to, the valuations of their properties upon which property rates (property tax) will be levied for the next 5 years.
The property draft valuation list for both East and West divisions of Hoima City is currently available for viewing in Hoima City government offices, as announced through a public notice issued by the office of the Town Clerk of Hoima City, Innocent Ahibishibwe, in accordance with the provisions of the Local Government (Rating) Act 2005.
Hoima City recently conducted a property revaluation exercise throughout the City, targeting commercial properties to be taxed over the next 5 years. The comprehensive GIS-enabled property valuation exercise was carried out by REDAH Informatics Ltd, with the support of USAID, as part of the Domestic Revenue Mobilisation for Development (DRM4D) project.
Property rates are levied on commercial properties. It is a tax on all buildings or structures that are used for the purpose of business, including rentals. However, this type of tax does not apply to residential homes where the owner resides, or to vacant land.
Qualified and registered valuation surveyors from REDAH Informatics assessed the age, characteristics and condition of properties throughout the city, and determined their rental value, taking into consideration market rental values of neighbouring properties with similar characteristics.
The property tax in Hoima City will be levied at 5% of the property’s rateable value. Rateable value means a property’s yearly rental value (regardless of whether the property is rented or not), minus a conservancy allowance (allowance for expenses).
Although, the measure of rental value doesn’t mean the property must be rented; it is merely a measure of property value. Business premises that are owner-occupied are still eligible to pay property rates.
The re-valuation of property is supposed to occur every after five years, however, Hoima’s was last done when it was still a municipality. The hope is that after the current valuation exercise, tax revenues will increase because of the many new property developments that have taken place since Hoima attained city status.
Where to View the Hoima Draft Valuation Lists?
You can find the draft valuation lists at the Hoima City headquarters (Kampala road, in the city centre), at the Hoima City East division offices (Fort Portal road, Busiisi trading Centre), and at Hoima City West division offices (Bugambe road, Kibingo trading centre).
Property owners in Hoima City have up until 10 August 2022 to view the list, and if applicable object if you are unhappy with any of the following:
- The inclusion of a property in the draft valuation list that you believe should be exempt from having to pay property rates (for example, a residential home in which the owner lives)
- Value of the property stated, or any other statement made or omitted from the draft valuation list, or
- The entire property value is assessed as a business, when only part of the property is used for business or partially owner-occupied
To object, you must complete a notice of objection form, and submit it to the local authority before August 10, 2022.
In addition to owner-occupied residential homes and vacant land, some other types of properties are also exempted from paying property rates tax. Such properties include places of worship, crematoriums, and public schools.
If you disagree with your property’s valuation assessment or believe your property should be considered exempt from paying property rates, download and complete the Objections Form RF12 for Hoima City before the August deadline.
Alternatively, property owners can pick the form from the Hoima city headquarters, the West division offices or the East division offices. Desk officers have been placed to issue these objection forms but also guide, and explain to the property owners the information which they may require to fill the form properly.
Where to Submit the Objection Form Once Completed
The objection form upon completion is submitted to the desk officer at any of the three locations mentioned above. Alternatively, it can be sent via email to [email protected].
The objection files will be submitted to the office of the Town clerk at the end of the display period, which is 10 August 2022.
Objections are to be heard by the Valuation Court. The Valuation Court in Hoima City has been constituted and it comprises four members approved by the Hoima City Council. The Court will be sitting in the City Council boardroom, starting 15th August 2022.
If the valuer agrees that they made a mistake, that the property has been wrongly included in the draft valuation list, or any statement was wrongly made or omitted about the property the valuation court may, on application by either party, order the property to be valued again.
When the valuation court has completed the hearing of all the objections to the draft valuation list and changes have been made, the chairperson will certify the draft valuation list under his or her signature and publish it by the Local Government in any newspaper.
Is Property Tax and Rental Income Tax Double Taxation?
Property rates tax is not the same as rental income tax. Property rates tax is based on a property’s value, whereas rental income tax is based on the rental income you earn from a rented property.
However, one can claim their property rates as a tax deduction to reduce their rental income tax liability.
Further, rental income tax is collected by the Uganda Revenue Authority. The revenue from this tax contributes to funding the national budget.
Whereas the sums of money collected from property rates tax funds the local government’s budget, being an important revenue source for the city to be able to fund local services for the citizens living in Hoima.
A minimum of 75 per cent of the monies raised from property rates must be allocated to the provision of services like city planning and management including road construction and maintenance, street lights, water and sanitation, local health clinics, antimalarial drugs, security, among other services provided through the Hoima City Council. No more than 25 per cent of the revenues raised can cater for administrative costs.
The Response of the Town Clerk of Hoima City
The Town Clerk of Hoima City, Innocent Ahibishibwe noted that Hoima property owners will form associations to be able to engage the City council on matters relating to property tax rates. “We thank the residents of Hoima for actively participating in the valuation exercise,” added Mr Ahibishibwe.
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