Uganda: Overview

RENTAL YIELDS

Last Updated: Dec 07, 2005

Yields are high in Kampala

The increase in supply and development and the refurbishing of existing supply is exerting downward pressure on rents, but yields are still quite high at around 8.6% to 10%.

Rents are around US$6 to US$8 per square metre (sq. m) per month (around Ugandan Shilling (UGS) 11,635 to UGS14,300). So the rent for a 200 sq. m. property would be around UGS2.5 million (US$1,358) per month.

Selling prices very widely from between UGS1.5 million and UGS10 million (US$815 to US$5,432) per sq. m.

There are no serious issues of security, power or water supply in the established expatriate areas, but it always helps to have a back-up generator.

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TAXES AND COSTS

Last Updated: Aug 03, 2006

Rental income tax is moderate in Ugunda

Rental Income: Rental taxes are imposed on all individuals earning rental income in the country, at 15% of gross income.

Capital Gains: No capital gains tax is levied in Uganda.

Inheritance: No inheritance or gift tax is levied in Uganda.

Residents: Residents of Uganda are taxed on their worldwide income.

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BUYING GUIDE

Last Updated: Aug 03, 2006

Ugunda's total transaction costs are moderate

The round-trip transaction cost. i.e. the total cost of buying and selling a property, is around 7.5% to 12.7%. The biggest cost is the real estate agent's commission, at 5% to 10%. Most fees are fixed, and paid by the buyer.

Real estate transactions are typically quoted and concluded in Ugandan Shillings.

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LANDLORD AND TENANT

Last Updated: Jul 19, 2006

Large advance rent payments are normal in Ugunda

Rental market practice is pro-landlord.

Rent: Rents and rent adjustments can be freely negotiated. Rents are paid three months to one year in advance, with subsequent rents paid quarterly, in advance. However, as the market becomes more of a tenant's market, one year advance payments are becoming less popular.

Tenant Security: There are no specific tenant protection laws, and it is relatively easy to evict tenants.

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ECONOMIC GROWTH

Unparalleled 20 years of growth

Uganda is a major safari destination with a large primate and bird population and a diverse landscape, dense jungles, and white-water rafting on the Nile. Tourists can also relax on the shores of Lake Victoria - the second largest body of fresh water in the world.

In the years following independence in 1962, Uganda experienced dictatorship and military rule. Most notably, Idi Amin rose to power in 1971 and imposed a reign of terror. His incompetence ruined the economy and he expelled about 50,000 Asians. From 1970 to 1980, government-initiated violence killed about half a million people.


Museveni's enormous achievement has been to put all that behind Uganda. From 1995 to 2005, the average annual GDP growth was 6.4%. Inflation was down to 8.2% in 2005 from a peak of 240% in 1987.

Crime levels are low, but it is advisable to avoid the northern region, where there is fighting between the Lord's Resistance Army (LRA) and government troops.

Though GDP per capita rose 76% in real terms between 1986 and 1995, poverty remains a serious problem, and 72% of the population live below the poverty line.