Property Purchase by a Foreigner

Property Purchase by a Foreigner

The process of buying property in Uganda by a Foreigner plus all the related costs.

The Ugandan Constitution of 1995 allows freehold and Mailo land ownership rights exclusively to the citizens of Uganda. Foreigners in Uganda can only own land or real estate under a Leasehold Land tenure system. This lease usually runs from 49 to 99 years and with an automatic renewable clause as may be agreed. Foreigners may get a lease from either Ugandan citizens or from Government of Uganda.

In the process of acquiring land for sale in Uganda, a real estate lawyer is necessary in the property transactions. When one makes an offer on the property and it is accepted by the landlord (seller), the due diligence process follows. The legal representative or a lawyer carries on a title search to examine the authenticity of the property. Once he is satisfied with the status of the property, he recommends the transaction to move on. He will then get the transfer forms from the Land Registry Office.

In the same case, a licensed professional surveyor goes to the property to establish and confirm its proper boundaries. Based on the land size, the location, the vegetation cover and the topography, the survey work can between 1 to 10 days or more. When this is accomplished, the property transfer forms are submitted Land Office to obtain approval to transfer. In some cases, the government valuer inspects the property to determine and ascertain the proper taxation based on its value. An assessment form is taken to the buyer, who then presents it to a commercial bank for an imbursement of stamp duty.

When all the fees have been cleared, the lawyer drafts the property sales agreement. There is no fixed agreement in this process. The sales agreement provisions differ basing on how the two parties agree. The property may be paid for fully in cash or in installments as may be unanimously agreed.

The property ownership transfer forms attached together with the signed sales agreement plus a stamp duty receipt are submitted to the Registrar´s Department in the Land Office and the payment of registration fee is done. This whole process at the Land Registrar´s Department may take around three weeks or more to accomplish. This is determined by the workloads or the title backlogs at that land’s office.

Summary of the Uganda Property Transaction Costs.

The costs related to property transaction process comprise of all costs of buying and then re-selling the property, the lawyers´ fees, notaries, taxes, Broker /agents´, registration fees and others if any.

  1. Legal Fees are about 1% to 2% of the property value.
  1. Stamp Duty is around 1% of the total property value.
  1. Registration fees are about 0.05% of the property value. These fees usually include registration fees, search fees, bank fees, consent fees plus other correlated costs.
  1. Broker or Real Estate Agent’s fees range from 5% to 10% of the property value. But this can also be bargained between the seller and the buyer.