Are Rentals Supposed to be Taxed ?

Malamu finished building his rentals last year and luckily, they were all occupied immediately. However, his caretaker called to inform him that there was a letter delivered stating that he was supposed to be paying taxes for owning them. Malamu is confused because no one told him about taxes when he was planning on building his houses.

WHAT DOES THE LAW SAY?

The law (Local Government (Rating) Act, 2005), allows the local government of an area such as a district or urban area, to charge a tax for any building that is used for a business purpose. This can be for schools, factories, Hotels, Private and Public Universities and rentals like houses, shops.

Even if you (the owner) are using the building and not renting it out, the law says you must still pay the tax. These taxes are known as property rates.

The local government of Malamu’s area is supposed to charge 30% of what he makes from rent in a year.

Did you know about rental tax?

#BarefootLaw

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