New simplified modalities for Real Estate Taxes

A Prime Ministerial decree of last July 2014 clarifies the hitherto complex clauses of 2006.

Owners of land (virgin or already utilized) and taxation officials in the country now have a simplified procedure for calculating what is supposed to be paid as real estate taxes. A Prime Ministerial decree of July 2014 sets the modalities for the administrative evaluation of real estates with regards to taxes.

Officials of the Directorate General of Taxation say the new decree sheds light on hitherto complex and ambiguous issues with relation to real estates as contained in the 29 December 2006 text on the matter.

What Has Changed? Unlike the old decree that set as criteria for determining the value of real estate, the type of neigbourhood and town, the new decree has come up with clearer criteria which span from territorial collectivities classified into the nature of council, zone of the neigbourhood with regards to whether or not access road is paved and the type of building or land.

The new decree groups territorial collectivities into three classes depending on the nature of the council area. While Yaounde and Douala City Councils have been grouped in the first class, the other city councils are in the second class and the rest placed in the third. The classes are further divided into zones depending on whether or not roads there are paved.

Who Pays What, Where? Going by the decree, the price of land per square metre is fixed according to decentralized territorial collectivity depending on its class vis-à-vis its zone. For Yaounde and Douala Urban Council areas for example, the price ranges from FCFA 5,000 to 200,000/square metre depending on whether the land is in zone one or two and in the category A or B. Meanwhile, taxes on houses are calculated in function to the standing of the building and its levels.

The standings include buildings constructed with final or long-lasting material (first standing) and those constructed with provisional material (second standing). And the price ranges from FCFA 2,000 to FCFA 400,000 depending on the standing and zone. While land is classified under category, zone and class, buildings are grouped into category standing, zone and class.

What Implication?

According to Claude Sylvain Ngneba Wandop, Senior Tax Inspector at the Directorate General of Taxation, the Prime Ministerial decree facilitates the calculation of real estate taxes and ensures a correct and convenient way of declaring real estate taxes by owners of land and buildings.

He noted that the real estate taxes which are local taxes needed to align with local realities. Claude Sylvain Ngneba Wandop observed that the decree will hopefully lay to rest hitherto wrangling better administrative officials and tax payers which results quite often in tax evasion, jeopardizing the development of the local councils collecting them.