Rent It Out or Sell? A Homeowner's Calculation
Updated 3 November 2026 · Land & Property editorial team
Selling makes sense when the sale price, invested elsewhere, would earn more than the rent you keep after tax, costs and empty months, and you do not need the house. As an illustration, a UGX 765 million house let at UGX 4 million a month nets about 4.5% a year after tax and costs. This is a calculation with stated inputs, not financial advice.
- Individual rental tax (URA, 2022)
- 12% of gross rent above UGX 2,820,000 a year
- Company rental tax (URA, 2022)
- 50% of expenses deductible, then 30% on the rest, an effective 15%
- 364-day treasury bill (Feb 2026)
- 12.50% effective yield at the 11 February 2026 auction (Nile Post)
- House asking prices on our platform
- Median UGX 765 million across 14 houses (Land & Property listings, Nov 2026)
Is it better to rent or sell my house?
It depends on four numbers: what the house would sell for, what it would rent for, what you would do with the money, and how long you can wait. Rent is slow income plus ownership, so you keep any rise in value and carry the risks. A sale is money in hand to use elsewhere, with the tax and transfer steps of How to Sell Your House or Apartment in Uganda. This page walks through one example. Change the inputs to your own, and check each against a current source. It is not financial or tax advice. Ask URA and an adviser about your own case.
How much rent do I keep after tax, costs and empty months?
URA's Commissioner Domestic Taxes explained in August 2022 that an individual landlord pays nothing up to UGX 2,820,000 of gross rent a year and 12% flat on the rest, and that a company deducts only half its expenses and then pays 30%, which works out at 15%. Rules change, so confirm the current rate with URA. Here is the example, with every input stated.
| Line | Amount (UGX) | Basis |
|---|---|---|
| House value | 765,000,000 | Median asking price, 14 houses, our Nov 2026 listings (asking, not sale price) |
| Rent at UGX 4,000,000 a month, 12 months | 48,000,000 | Assumed for illustration |
| One month empty | -4,000,000 | Assumed |
| Rent collected | 44,000,000 | |
| Repairs and management at 10% | -4,400,000 | Assumed |
| Tax: 12% x (44,000,000 - 2,820,000) | -4,941,600 | URA 2022 individual rule, no expense deduction applied |
| Net income a year | 34,658,400 | 4.5% of the house value |
The gross rent is 6.3% of the value, but the owner keeps 4.5%. If the house is in Kampala and rented, KCCA says owners of rented residential property are liable for property rates at 6% of the rateable value, defined as the net annual rental value, while owner-occupied residential property is currently exempt. That cost is not in the table, so ask KCCA what it would be for you. Keep rent receipts, as in rent receipts and records.
What would sale proceeds earn instead?
Sale proceeds are not the full asking price. The buyer pays stamp duty, but you may still owe your advocate and any agent, and you must settle any mortgage first (see documents to sell house). Ask what your net would be. If it were the full UGX 765 million, a deposit or bond must earn about UGX 34.7 million a year, or 4.5%, to match the rent above.
For a dated comparison, the 364-day treasury bill cleared at an effective yield of 12.50% at the Bank of Uganda auction of 11 February 2026, with the 182-day at 11.99% and the 91-day at 10.50%, as Nile Post reported. At 12.5%, UGX 765 million would earn UGX 95.6 million a year before any tax on the interest, which we did not check. Yields move at every auction, and a bill is not the only choice, nor a promise of what you would get. We do not guarantee any yield, here or on any listing.
What does the calculation leave out?
Plenty. The example ignores any rise or fall in the house's value, which can matter more than a year's rent. It ignores your own use of the house, the cost of a vacancy longer than a month, and the risk of a bad tenant. It ignores inflation, which cuts the real value of both rent and cash. It also leaves out tax on a sale. URA says buyer and seller each need a TIN, and whether income tax applies to your gain depends on whether the house is a business asset. Read our guide to selling a house before you decide, and compare the tenant route in Selling a House With Tenants in It if you sell with a tenant in place.
If you are comparing renting against buying for yourself, see Rent or Buy in Kampala? The Break-Even. If the property is commercial, see Selling a Commercial Building or Rental Block.
When does selling win, and when does renting?
- Selling tends to win when the house sits empty, needs money you do not have, is far from where you live (for example if you live abroad), or when the net rent is well under what a safe alternative pays.
- Renting tends to win when you want the house later, the area is rising, the tenant is reliable and you are not short of cash.
- Neither is right when the title or tax position is unsettled. Fix that first.
Whatever you choose, keep records. If you sell, you can list your property free, or browse house listings to see what similar homes ask. Return to the Sell Your Land, House or Forest in Uganda hub for the other seller guides.
Listings available now
Live from Land & Property on 4 November 2026. Prices are the sellers' asking prices.
-
2 in 1 houses for sale in Kisaasi at Ugx350m
UGX 350,000,000
-
3+1 Bedroom house in Bwebajja at 520m
UGX 520,000,000
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Residential House in Kira at Ugx170m
UGX 170,000,000
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Residential House in Kira Mulawa at Ugx350m
UGX 350,000,000
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Residential House in Nakwero @Ugx480m
UGX 480,000,000
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4-Bedroom Residential House in Kitikifumba Kira
UGX 850,000,000
Frequently asked questions
Is it better to rent or sell my house?
It depends on the net rent you would keep, the return on sale proceeds, any change in the house's value, and whether you need the money. In our example, net rent was about 4.5% of value while a 364-day treasury bill yielded 12.50% at one February 2026 auction, before tax on the interest. This is not financial advice.
How much rent do I need to keep a house?
Enough, after tax, costs and empty months, to match what the sale money would earn and to justify the risk. Work out your net rent as in the table, then compare it with a dated alternative return.
How is rent taxed in Uganda?
URA's 2022 article says an individual pays 12% on gross rent above UGX 2,820,000 a year, and a company deducts half its expenses and pays 30% on the rest. Confirm the current rule with URA before you rely on it.
Do I pay property rates on a rented house?
In Kampala, KCCA says owners of rented residential property are liable for rates at 6% of rateable value, the net annual rental value, while owner-occupied residential property is currently exempt. Other councils may differ.
Sources
- Why we should all embrace the new rental tax regime (26 August 2022), Uganda Revenue Authority (The Taxman blog) (accessed 2026-11)
- BoU attracts Shs1tn in treasury bill bids far above Shs355bn target (14 Feb 2026), Nile Post (accessed 2026-11)
- Property rates (owner liability, arrears certificate), Kampala Capital City Authority (accessed 2026-11)
- 10 facts on the TIN requirement for land transactions above UGX 10 million, Uganda Revenue Authority (accessed 2026-11)
- Land & Property listings snapshot, 3 November 2026 (93 published listings), Land & Property (accessed 2026-11)