Land rent interest rules clarified

DODOMA: LANDOWNERS across the country have been given six months to settle annual land rent obligations before interest is imposed, with the measure intended to improve compliance and ensure timely collection of public revenue.

Deputy Minister for Lands, Housing and Human Settlements Development, Mr Kaspar Mmuya, told the National Assembly in Dodoma yesterday that land rent becomes due on July 1 at the beginning of each government financial year.

He was responding to a basic question from Tinnar Chenge (Special Seats, CCM), who wanted to know why interest on land rent starts being charged from January instead of at the beginning of the government financial year. Mr Mmuya said the National Land Policy of 1995, 2023 edition, recognises land value based on factors including its use, location, level of development and availability of infrastructure.

He said land value is also used in determining various fees and charges, including land rent payable by landowners. According to the deputy minister, land rent is an annual obligation that applies throughout the period of land ownership and becomes due on July 1 every year.

“Landowners are required to voluntarily pay their annual land rent within the first six months of the financial year, giving them an opportunity to settle their obligations without incurring interest,”Mr Mmuya said.

Mr Mmuya said the arrangement also enables the government to plan and implement programmes based on revenues collected from land-related charges.

ALSO READ: More Tanzanians to benefit from carbon trade

He cited Section 35(11) of the Land Act, Cap 113, which provides that where land rent is not paid within six months after it becomes due, interest is charged at a rate of 0.5 per cent per month on the outstanding amount until payment is made.

He added that where the outstanding rent remains unpaid for more than 12 months, the interest rate increases to one per cent per month. In her supplementary question, Ms Chenge questioned the interpretation of the provisions, saying that land titles indicate that annual land rent is payable from July 1.

Responding, Mr Mmuya said the provisions of the Land Act and the Public Finance Act should be read together when dealing with the collection and payment of land rent. He said the Land Act provides for a six-month period within which landowners can fulfil their obligations without being charged interest.

The deputy minister further said Parliament amended the relevant provision in 2025, reducing the applicable interest rate to 0.5 per cent per month. He said the reduction was intended to keep the charge manageable for landowners while maintaining an incentive for them to comply with their payment obligations.

Mr Mmuya maintained that there was no contradiction between the Land Act and the Public Finance Act, adding that the Commissioner for Lands has the mandate to oversee the collection of land rent. He urged landowners to check their land rent status and settle outstanding obligations before the expiry of the six-month grace period to avoid additional interest charges.