The impact of rental income tax amendment on the development of commercial properties in downtown (Kikuubo) Kampala.

Abstract

This research was intended to analyze the impact of Rental Income Tax amendment on the development of Commercial properties in Downtown Kampala. The main objective of the research was to assess the the impact of rental income tax amendment on the development of commercial properties in the real estate sector in Down town (Kikuubo) Kampala. The specific objectives included; to understand the level of awareness about the Amendment of the Rental income tax by the landlords, to investigate the extent of applicability of the new amendments of the rental income tax, to find out the extent of burden caused by the new amendment on the rental income of landlords in Downtown Kampala, to determine the degree of commercial real estate development in after the rental income tax amendments. The research involved both qualitative and quantitative approaches. Survey population included property managers, landlords, property developers, and Uganda Revenue Authority Officers. Additionally, data collection techniques included questionnaires and face to face interviews. The influence of rental income tax on commercial real estate development were assessed based on factors such as the impact of the tax on profits made from rental income, the various conditions under which investors furthermore invest in real estate and other factors that influence real estate development. In summary from the findings of this study, the analysis made by the researcher indicates that the Rental Income tax has a significant effect towards the ability of a property owner to furthermore invest in Real estate. This indicates that the income profit levels generated by property owners depend on the level of tax imposed on the rental income while at the same time the level of real estate development as well depends upon the margin of profits earned from real estate investments. It is therefore important for the Government to review the current rental income tax and as well explore tax incentives for landlords, property owners and developers so as to mitigate the direct impact of the tax on the investors which would intern encourage future investments within the real estate sector.