Property rate bands and the state of property tax

Policy brief Dec 2025 Tax, Cities and Sustainable Growth

The Kampala Capital City Authority (KCCA) has been highly successful at raising own-source revenue from property rates. Annual revenues more than doubled over 2018-2024, from UGX 24 to 58 billion. Yet an estimated 37% of total annual liability was uncollected in 2024.

Revenues have typically come from properties in Central Division that have a commercial use or a high value, but the remaining potential revenue lies in lower-value, more residential, and more peripheral properties, which are harder to collect from.

The KCCA recently introduced a ‘rate bands’ policy that lowered the tax rate from 6% to 4% on eligible properties valued below UGX 5 million. Surprisingly, the discount had negligible effects on compliance, cutting revenue from discounted properties by 20% and overall revenue by 1.9%.