If you rent out property in Rwanda as an individual (or as another non-corporate taxpayer not under Corporate Income Tax), you generally pay Rental Income Tax once per year. The taxable base is simplified: Rwanda allows a 50% standard deduction from gross rent, plus a bank-interest deduction if you can prove qualifying interest paid on a loan used to buy or build the rental property.
This guide is for foreign or local individuals who own a house or apartment in Rwanda and rent it out long-term (e.g., yearly leases). If you invest through a company (SPV), rental income is typically taxed under CIT, not under the Rental Income Tax regime.
Disclaimer: This article is general guidance for planning and education. Real-world treatment depends on your facts and documentation. We recommend working with a tax/accounting firm like Visions Africa in Rwanda to avoid penalties and ensure correct filings.
Rental Income Tax is a tax on income earned from renting out immovable property (houses, apartments, buildings) when the landlord is not taxed under Corporate Income Tax.
The key advantage for individual owners is simplicity: instead of itemizing every maintenance expense, Rwanda applies a standard 50% deduction to gross rental income—plus an additional deduction for proven bank interest in certain cases.
Once per year, with the annual filing deadline on 31 January (through the local government tax system).
Lease agreements (written contracts are strongly recommended)
Rent schedule (monthly rent × 12, or your actual receipts)
Proof of receipt (bank statements / payment receipts)
If claiming interest: loan agreement + bank statements + interest schedule
Rwanda applies progressive brackets to your taxable rental income:
0% up to RWF 180,000
20% from RWF 180,001 to RWF 1,000,000
30% on the portion above RWF 1,000,000
The taxable base is simplified. The standard method is:
Taxable Rental Income = Gross Rental Income × 50%
This means Rwanda automatically treats 50% of rent as expenses (repairs, maintenance, insurance, management, etc.) without requiring you to list each cost item.
If you can prove bank interest paid on a loan used to purchase or construct the rental property, you may deduct that interest in addition to the 50% standard deduction:
Taxable Rental Income = (Gross Rental Income × 50%) − Actual Bank Interest Paid
Interest is counted from the beginning of the rental period within the tax period (in practice, keep clean proof and timelines).
Public guidance consistently uses the term “bank interest” and requires proof.
What matters most in practice is:
the lender is a regulated bank/financial institution (not an informal lender), and
the loan is clearly linked to the purchase/construction of the rented property, and
you can evidence interest actually paid.
If the loan is offshore (e.g., foreign bank), documentation and traceability become even more important—so it’s wise to confirm your specific situation with a local tax advisor before relying on the deduction.
Scenario
Gross annual rent: RWF 24,000,000
Bank interest paid (qualifying, proven): RWF 3,000,000
Step 1: Apply the 50% standard deduction
Gross rent × 50% = 24,000,000 × 50% = RWF 12,000,000
Step 2: Deduct proven bank interest
Taxable rental income = 12,000,000 − 3,000,000 = RWF 9,000,000
Step 3: Apply the progressive rates
First RWF 180,000 at 0%
Next bracket up to RWF 1,000,000 at 20%
Remaining amount above RWF 1,000,000 at 30%
Taxable rental income: 9,000,000 RWF
0% on first 180,000 = 0
20% on the next 820,000 (from 180,001 to 1,000,000):
820,000 × 20% = 164,000
30% on the amount above 1,000,000:
9,000,000 − 1,000,000 = 8,000,000
8,000,000 × 30% = 2,400,000
✅ Total tax due = 164,000 + 2,400,000 = RWF 2,564,000
Even when the tax amounts are manageable, penalties can be expensive if filings or payments are missed.
Not keeping written leases and rent evidence
Declaring rent inconsistently (especially when tenants pay via bank – we recommend to keep a separate bank account for simple traceability of incomes)
Claiming interest without clear proof (or without clear linkage to the rental property)
Missing the annual filing deadline (31 January)
Work with an accounting firm that can:
set up a clean rental ledger,
confirm your eligibility for the interest deduction,
file on time,
and keep your records audit-ready.
Before filing Rental Income Tax:
Lease contract(s)
Rent schedule (annual total)
Proof of payment (bank statements / receipts)
If claiming interest: loan agreement + interest statements + payment trail
Confirm whether you’re taxed under rental income tax (individual) or under CIT (company)
Usually no. Companies renting out property normally pay tax under Corporate Income Tax (CIT) on net profits, not under the individual Rental Income Tax regime.
The system already gives you a 50% standard deduction. You typically don’t need to list maintenance expenses one-by-one.
If you can prove bank interest paid on a qualifying loan linked to buying/building the rental property, it may be deductible in addition to the 50% standard deduction.
For many entrepreneurs in Rwanda, navigating compliance requirements can feel overwhelming—especially in the early stages of building a business. One of the most common areas
We are seeing early- and even late-stage groups still booking interest-free related-party loans to “keep things simple.” 𝐁𝐮𝐭 𝐭𝐚𝐱 𝐚𝐮𝐭𝐡𝐨𝐫𝐢𝐭𝐢𝐞𝐬 𝐬𝐞𝐞 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐞𝐥𝐬𝐞:(1) transfer pricing
