KAMPALA: The Government of Uganda has been urged to fast track a policy that will regulate the real estate sector so as to attract the private sector to invest in quality, low-cost houses that majority Ugandans can afford.
According to Uganda’s Financial Sector Development Strategy (FSDS), the country has a housing deficit of Shs1.6 million units, with an increasing annual demand of between 180,000 and 210,000 units. Many Ugandans live in semi-permanent houses, especially in urban slums and up country.
According to Nationwide Properties Ltd, one of the leading real estate developers in Uganda, this is because the real estate sector is not attractive to many private sector players due to high taxes and lack of a housing policy.
“The housing sector is not regulated, which means no standards in place for authorities to enforce. This calls for a housing policy in place,” Nationwide Properties Ltd says.
The real estate giant adds that the current taxation by government is also suffocating the sector.
Businessmen Minex Karia and Pradip Karia are the brains behind the Property Services Ltd, and Nationwide Properties Ltd, all in Uganda.
Real estate players pay Value Added Tax (VAT) of 18 percent and withholding tax of 6 percent to the Uganda Revenue Authority (URA). Local governments also collect property taxes that are determined by respective local councils.
This, according to Nationwide Properties Ltd, is very prohibitive.
It also urges financial institutions to lower interest rates for real estate lenders.
“Anyone who is borrowing from lending institutions for a mortgage should be given a loan at affordable rates. The current rate of 17 to 20 percent is too high. We have many taxes that should be amalgamated into one tax like it is in India (10 percent),” Nationwide Properties Ltd states.
Nationwide Properties Ltd says whereas it recognizes the need for tax to support economic development, it appeals for delayed taxation in low-cost housing as a strategic plan for a wider tax base in future.
“This is one way to boost Build Uganda Buy Uganda (BUBU) that is steadily progressing,” the company says.
For the last 10 years, Nationwide Properties Limited under its brand, the Royal Palms, has been building residential properties across Kampala, Uganda, in both ‘rental’ and the ‘for sale’ markets.
They have built over 500 luxurious residential houses in Mulago, Kololo and Nasakero, Mbuya and now Butabika. Some of the houses have been bought while others are available for rent.
The company says given rapid rates of population growth and urbanization, a widening housing need may overwhelm cities in the near future.
Asked what makes Nationwide Properties exceptional on the market, the company director says: “Our approach to building new homes is based on a unique set of principles that ensure we are the country’s premier developer in the residential sector. You can expect the highest level of service.
Our residences are built with the customer at heart, ensuring we provide the highest quality of amenities and services. Our understanding of the customers’ needs, and requirements makes the home buying process a simpler, less stressful experience.”
