Background on Reform
In September 2019, Freetown City Council (FCC) began a comprehensive reform of the city’s system of property taxation and business licensing. The Reform’s objectives are the following:
- increase the numbers of properties and businesses included in the city’s database
- assess property values in a fairer and more transparent way
- digitize and automate the taxation and business licensing systems
- raise revenue for Freetown City Council
Previously, property rates and business licences and were largely based on the size and the type of property/business. Properties of the same type and similar sizes were therefore taxed similar rates regardless of the properties’ actual value, which could vary significantly depending on characteristics like the location, state of repair, and other features. So, a very nice house with modern features could pay the same rate as a poorer house in poor condition. The same was true for businesses.
In 2020, the city has moved to a system of “points-based valuation” for both properties and businesses. Points-based valuation combines information about the area, location, and easily observable external characteristics of a property to generate a relative value for a property, expressed in points. Property tax bills are then generated for each property by applying a uniform tax rate (known as a “mill rate”) to those points. This new valuation system ensures that property and business owners with more valuable buildings pay more than those with poorer buildings.
At the FCC we are committed to ensuring that the points value assessment on each property is fair. Please visit the FCC’s Enquiry and Appeals Desk if you have any enquiries regarding your valuation assessment or if you believe an error was made when we collected information on your property. Alternatively, you may contact a free-toll inquiry line, write us an email or WhatsApp us (please see the “contact information” section below for more details).
Frequently Asked Questions (FAQs)
I do not understand the new system of assessment and how to calculate the annual assessed value. Can you explain this to me?
The starting point for assessment is the size of the building. The rooftop area, measured using satellite images, is used to approximate the building area and multiplied by the number of floors to get the Surface Area. The square root of this Surface Area is then taken to come up with the Surface Area Value (reflecting the fact that an extra 100 square feet matters more for smaller properties). This Surface Area Value is then multiplied by the Base Value, which captures the average rateable value of a square footage in Freetown, to get the Initial Assessed Value. Finally, the Initial Assessed Value is adjusted based on the 28 characteristics of the assessed property. For example, if the features are below average (say for the condition of the wall), the assessed value receives a reduction.
Can I see what property characteristics were recorded for my property?
Yes. You can go to the Enquiry and Appeals Desk located at the FCC and ask a Frontline Officer to print out the details of your property characteristics and your associated adjustments.
What was the basis of the assessment in previous years and why is it different this year?
Historically, the assessment may not have been consistent and was determined largely using the area of the property and the tariff for that specific property type. This meant that two properties of the same type and similar sizes could end up paying similar property rates, even if one of them was better located and much more modern than the other. The new, digital database is much more up to date as it contains more than 160,000 properties, compared to 60,000 properties in the old database. It is based on property location, type and features, applied consistently across all properties of the city to ensure both uniformity and fairness.
How can I check if my assessment is fair?
The FCC publishes a Rate Book and Valuation List that includes all of the assessed properties in Freetown. You can go the FCC’s Enquiry and Appeals Desk to inspect this document, which contains all the houses in your area if you are interested in seeing how properties in your neighbourhood were assessed.
What is an assessable building?
All properties are liable to be assessed, except for: 1) Properties that are not permanent and or do not have a completed roof, walls and foundation; 2) Properties that were constructed illegally (either without a rightful owner and/or overstepping the area reserved for pavement or sidewalk); 3) All properties that are exempted from the property tax (see section 70 of the LGA), including properties used for public religious worship, public hospitals and clinics, public universities, colleges and schools, buildings on burial grounds, diplomatic missions/embassies.
Why do I need to pay a Property Rate/Business Licence?
You need to pay the Property Tax/Business Licence to support the FCC’s Transform Freetown agenda and provide essential services. We worked hard to modernize our property tax system to make it as fair and equitable as possible. We are proud to say that we now have a system in which every property owner faces the same rules – from the valuation criteria employed to the consequences if you do not pay. Therefore, every property and business owner in the city will be expected to contribute your fair share. Note that it is a legal requirement to pay your property tax and/or business licence (LGA 2004 sections 56 and 69).
What will my taxes be spent on?
The target total tax and non-tax revenue collection for 2020, including property taxes and business licences, is Le 49.3 billion. This revenue will be spent on the FCC Transform Freetown Agenda, which includes expanding and improving waste collection, drainage cleaning, flood mitigation activities, as well as the normal functioning of the FCC. Please contact your Councillor for more information about what is being done in your Ward.
I paid to pave the street outside my house so why am I taxed more?
The assessment for both property tax and licences is based on value. This follows the Local Government Act 2004 as well as international standards. The assessment does not consider more personal issues about who constructed the house, or who paid for local improvements. The value recognises the size type and standard of buildings, measuring attractive features with a higher value, and poorer features with a lower value.
I have never had to pay before now so why is it different this year?
It has always been a legal requirement to pay your tax/licence but it is possible that your property was left out of our old property registry, as it only captured a fraction of all properties in Freetown. The Reform exercise, which aimed at reassessing the value of all buildings and businesses in a fair and consistent way, now ensures most properties in Freetown are in our property registry. Please go to the rates/licence department to verify the status of your arrears.
For Property Owners
Why do I pay more taxes if I built and paid for a large house with nice features? Am I being punished by having to pay more taxes than others who fail to improve your poor houses?
Property taxation in Sierra Leone and throughout the world is paid on the basis of the property’s value. The Laws in Sierra Leone (Local Government Act section 69) mandate that FCC levies taxes on this basis. Taxing properties on the basis of value is seen as fair since it taxes the richer property owners proportionately more than poorer ones.
Why is my property rate higher than last year, and who took this decision?
Recall that property rates are calculated as the product of the property value and the mill rate. So, a higher property rate can either be due to a higher assessed property value or a higher rate. Note that property values are assessed by the Valuation Department, whereas mill rates are political decisions taken by Councillors on the basis of economic and budget considerations.
For Business Owners
In previous years I was billed for the specific type of business but this year has changed to a different method. Why the change?
In the old system, licences were issued to each business only according to business type. This year, for the sake of fairness and equity, licences are also calculated on the basis of the size of the business, its location and the features of the property where the business is located. Concretely, the formula is: licence rates = property value x % of building occupied by business x mill rate. Note that this year FCC has also reduced the number of categories of businesses from a list of over 400 to only 6 (including consumer staple, consumer discretionary, industry and services, communications and IT, energy and financial services).
I am the owner of a property/business yet the RDN I received does not have my name on it. Why is that?
All RDNs are addressed to “The Owner,” care of a contact name. In some cases, the contact name may in fact be the owner. The reason the RDN does not always address the official owner is because FCC enumerators did not have the time or resources to verify ownership documentation for all properties in the city. As property rates are attached to the property itself, rather than to the owner, it is also not necessary to identify a legal owner before issuing an RDN. If, however, you wish to update the owner information recorded in the FCC’s database, please visit the Enquiry and Appeals Desk located at the FCC with all relevant documentation.
Does the name shown on my RDN refer to the property/business owner?
No. The FCC register of contact names for buildings is an informal register and does not constitute proof of ownership. However, FCC does like to note contact names to ensure the Demand Notices are forwarded to the owner. The FCC can, at the owner’s request, store copies of legal ownership documentation in its system for safe keeping.
Why has my area not yet received RDNs but other areas have?
In order to ensure seamless introduction of the new system during billing, payments and enquiries, FCC is adopting a phased approach by delivering RDNs to half of the properties, with the remainder of properties receiving RDNs in a second phase.
I own only part of a property. Is there a way for the property to be divided up among the different owners so that we each receive our own Rate Demand Notice?
Unfortunately, there is no formal way for the assessment department to assess each individual section within a building. The best way is for the group that makes up and owns the collective parts of the ownership of the building to divide up the total payable. This could be done, for example, by using the square footage area occupied by each owner, setting a rate per residential/commercial unit or by dividing the rate payable equally. Ultimately, this decision must be taken by owners. FCC only requires that payment be made for the whole property.
What is the “Plus Code” mentioned on my RDN?
In Freetown, buildings do not always have a reliable street name nor a house number, so FCC has adopted Plus Codes for building identification. A plus code is a unique eleven-character code that acts like a postal code and street address for any building that does not have one. The Plus Code for the FCC offices at 17 Wallace Johnson Street, for example, is FQR7+HX. Plus codes give addresses to everyone, everywhere, allowing them to receive deliveries, access emergency services, and so that visitors can easily find where you live or where your business is located. For smartphone users the Google Maps app can direct the user right to the door.
For Property Owners
I do not understand my Rate Demand Notice. Can you explain how my rate was calculated?
The Property Rate is calculated by multiplying your property valuation assessment by the mill rate for that property type. Recall that the starting point for assessment is the size of the building. The rooftop area, measured using satellite images, is used to approximate the building area and multiplied by the number of floors to get the Surface Area. The square root of this Surface Area is then taken to come up with the Surface Area Value (reflecting the fact that an extra 100 square feet matters more for smaller properties). This Surface Area Value is then multiplied by the Base Value, which captures the average rateable value of a square footage in Freetown, to get the Initial Assessed Value. Finally, the Initial Assessed Value is adjusted based on the 28 characteristics of the assessed property. For example, if the features are below average (say for the condition of the wall), the assessed value receives a reduction.
Why do I have several RDNs for my single compound but in previous years I only received one bill for the entire compound?
Each house in your compound is assessed separately based on its size and features. So, to be fair, poorer houses in the compound are valued lower than the larger, nicer houses. The total rate is the sum of each individual assessment. This new system is fairer and more transparent because it allows to see how the total assessment of the compound was made.
Why are Rate Demand Notices not exactly the same for everyone?
During the first year of this new system we are still learning about what information taxpayers wish to have displayed on your tax notices. To learn more, there are small differences in the details provided on some tax notices. Rest assured that the tax assessment, and all other rules, are identical for all taxpayers.
Why does my building have multiple RDNs?
Where there is a mix of uses in each building, for example commercial and residential, each use is assessed separately and on a different basis. So, if you have a mixed-use building with shops on the main floor and flats upstairs, each use is assessed and taxed separately. Both notices together will be the total property tax for the owner of the building.
For Business Owners
I do not understand my Business Licence Demand Notice. Can you explain how my licence fee was calculated?
For businesses located inside assessable properties, the minimum business licence fees are Le 300,000 for consumer staples and Le 350,000 for all other business types. Bigger businesses, however, will be taxed on the basis of the Assessed Annual Value of the property, adjusted for the proportion of the property occupied by the business and the mill rate for the business category concerned (there are a total of six business categories): licence = assessed annual value x % property occupied by business x mill rates. For businesses located in non-assessable properties, the business license fees are: Le 150,000 for small consumer staples; Le 300,000 for large consumer staples; Le 350,000 for all other small businesses; Le 350,000 for all other large businesses. For business license fees of specific “portfolio business types”, please inquire at the Business License department.
My company has two locations in Freetown – why do I need two licences for the same company doing the same type of business?
Business licences are now assessed on the basis of the size, location, and quality of the building where business activities take place. So, if you have two locations, the total size has to consider both locations. Similarly, a good location compared to a poor location needs a different assessment to remain fair and consistent. We also consider the features of the property the business is located in, since we expect more modern buildings to house higher-earning businesses. To achieve fairness, all of these elements are considered separately when assessing each different business location.
I believe my property/business was not correctly assessed. What can I do?
You can go to the Enquiry and Appeals Desk located at FCC to lodge an appeal. You need to bring your Demand Notice or write down your unique property/business ID number to help Frontline Officers find the record of your property/business. If you want to contest the size of a business, you also need to bring a certified surveyor’s measurement certificate.
I do not agree with the roofline surface area measurements of my property. What can I do?
The measurements of all Freetown properties are taken from a satellite image that properly scaled for measurements and stored at the FCC. You can challenge the measurement by visiting the Enquiry and Appeals Desk where an officer will go through the property record with the taxpayer and carefully trace the building roofline on the satellite image screen. Note that the roofline measure is greater than the former exterior wall measure and greater than internal measurements. However, all properties are measured in the same consistent manner thus assuring equity among all taxpayers.
I do not agree with the measurements of the business premises. What can I do?
You can dispute the business square footage area by approaching the Enquiry and Appeals Desk at FCC and submitting a qualified surveyors report and drawing. Your business size was estimated as a proportion of the total surface area by an enumerator in the field. Even if it is not perfect, this estimate minimized the need
I have lost my Rate/Licence Demand Notice. What can I do?
You can go to the Enquiry and Appeals Desk located at FCC with your unique property/business ID number. If this number is lost, you can also bring some other official documentation to help the Officer find the record of your property/business
I want to update the contact information for my property. Where can I do this?
You can go to the Enquiry and Appeals Desk located at FCC. A Frontline Officer will ask for official documentation to prove property ownership so please bring this along with you. Please also bring your Demand Notice or write down your unique property/business ID number to help the Officer find the record of your property/business.
I would like to see a breakdown of the property features that were recorded for my property. Where can I see this?
You can go to the Enquiry and Appeals Desk located at FCC. A Frontline Officer will print out a full list of your building features with the adjustments made. Please bring your Demand Notice or write down your unique property/business ID number to help the Officer find the record of your property/business.
Where can I pay my property rate/business licence?
Payments can be made at the FCC with the following four banks: Zenith, Standard and Chartered, Rokel or Ecobank. Payments can also be made outside of the FCC at any branch of Ecobank or Rokel Commercial Bank.
Can I pay at my local branch of any bank as before?
The banking arrangements have changed and the process is greatly reduced in length. In previous years there were many banks. This year, we have increased the number of on-site banks to four banks (Zenith, Standard and Chartered, Rokel and Ecobank). For better recording control however, only Ecobank and Rokel Commercial Bank accept rates and licence payments made outside of the FCC.
I have already paid my property rate/business licence for 2020, so why did I receive this RDN notice to pay again?
The new system of assessment was not ready at the beginning of 2020. All payments made in early 2020 were interim payments, as stated on the RDN that you received at that time. If you bring your receipt for the amounts paid in early 2020, these amounts will be credited to your account. If the current taxes or licence fee exceeds the interim payment then you must pay the difference. If the interim payment was greater than your new RDN, then you are entitled to a credit that will be applied against your property rate/licence fee next year.
Can the Owner send someone to pay on your behalf?
Yes, anyone can pay on behalf of the Owner, so long as you have the right RDN details for payment. The owner should then ask to see the bank slip to confirm that payment was made and contains the right property/business number.
Why are my property arrears from previous years not noted on my RDN and how can I settle my arrears?
You may still have property arrears that pre-date this reform that you wish to settle with the FCC. These arrears are not included on the new RDNs issued this year, but will again appear in future years, as we are in the process of transitioning that arrears information into the new property tax database. Please first head to the FCC Rates Department to settle any outstanding arrears. Beginning next year all of this information will be captured in the new database and communicated on the new RDNs, and you will be able to pay arrears in the same way that you pay your annual property rates.
If I pay at an offsite Ecobank or Zenith branch, do I need to go back to the FCC to get an official receipt?
Previously taxpayers needed to go to the FCC Cash Office with your bank slip to get an official receipt. As of now however, there is no need to obtain receipts from the Cash Office as banks will automatically credit your FCC account. If you require an official receipt then you can obtain one at the FCC’s Enquiry and Appeals Desk.
For Property Owners
What should I know about payment in instalments, payment deadlines and penalties for property rates?
Previously, payments of rates could be made in 3 instalments (due March 31, June 30 and September 30) and a poundage of 15% would be charged on the total amount due after each instalment period. This year however, given the delay in RDN distribution and the challenges posed by COVID-19, the only payment deadline is 30th September 2020, after which date the defaulter will incur a penalty of 5%. Note that early payments are encouraged: for payments received before 31 July 2020 the FCC will provide a credit to your account worth 5% of total payment. This amount will be deducted from your FY2021 bill.
For Business Owners
What should I know about payment in instalments, payment deadlines and penalties for business licenses?
The only payment deadline for business licenses remains 30 June (early payments are not mandatory but encouraged). As per the Local Government Act (2004), section 61(4), the penalty for operating without a licence is a fine of up to Le 600,000.
I have paid for my business license fee for this year. Where can I get the certificate for my license?
An official Licence Certificate will be available at FCC business licence department on the presentation of a receipt or paying in slip where the Licence Fee is greater than Le 500,000. For those of Le 500,000 and below a certificate is not available nor necessary at FCC and a receipt is sufficient.
For Property Owners
What happens if I do not pay my property rate?
It is a legal requirement for all property owners to pay property rates (LGA 2004, section 69). As per the LGA (2004) sections 78-80, if you do not pay before the deadline has passed the FCC can take different kinds of “actions” against you, of escalating strength: FCC will first distribute warning letters including the financial penalties imposed and then, in a second stage, warrant notices indicating that the property will be seized. Note that, given how important property taxes and licences are for Council revenue, FCC will also prosecute defaulters at the Magistrates’ Court and at the High Court.
I am the tenant of a property whose owner has not paid your property rate. Will I be affected?
Yes. Once the deadline for payment has passed, owners will receive a warning letter for late payment. After that point the FCC may also approach the tenant, who is entitled to pay property rates on behalf of the owner, and deduct any such payments from the rent due. The tenant may wish to do so in order to ensure tax compliance in the city, and avoid the possibility of disruptions or property seizure resulting from non-payment. If, after receiving the warning letter, payment has still not been received from either the owner or tenant the FCC may issue a warrant letter indicating a specific liability to property seizure, which may include the tenant’s movable property.
For Business Owners
What happens if I do not pay my business licence?
It is a legal requirement for all business owners to pay business licences (LGA 2004, section 56). As per the Local Government Act (2004) section 61(4), a business operating without a licence can be fined up to Le 600,000.
Exemptions and Tax Reliefs
What properties are exempted from property taxation?
As stated in section 70 of the Local Government Act, all buildings (including buildings owned by or in occupation of the Government and the local council) are liable for assessment, with the exception of: churches, chapels, mosques, meeting-houses or other buildings exclusively used for public religious worship; buildings used as public hospitals and clinics; buildings used for charitable purposes; buildings used for public educational purposes including public universities, colleges and schools; buildings on burial grounds and crematoria; buildings owned by diplomatic missions as may be approved by the Ministry responsible for foreign affairs.
Note, however, that these exemptions do not affect the following property types, which are assessable: dwellings and other buildings used by religious organizations; private hospitals and clinics; private schools; houses occupied by foreign embassy staff; funeral parlors adjacent to burial grounds; habitable buildings that are not occupied; portions of buildings under construction that are completed; outbuildings and secondary buildings that are inhabited; vacant buildings.
My property has been empty since the beginning of the year. Can I have an exemption for property rates or business licence?
According to the law, property taxes are payable whether the property is vacant or not. However, the business licence is only payable if there is a business operating on the premises. If a business is only operating for 6 months a year there is no relief for the vacant period.
My property is under construction. Should it not be exempted from property tax until completed?
Assessment for property tax is not made if the entire building is under construction. If a building is partially built, assessment is made on that completed portion. For example, if only the ground floor is completed and habitable and the second floor is still under construction, only the ground floor will be assessed. When the building is completed, it will then be reassessed.
Is the FCC putting in place any tax reliefs in light of the COVID-19 (Coronavirus) crisis?
No tax relief is provided this year for property and business owners. While the COVID crisis presents challenges for all Sierra Leonean’s, it also makes it more important than ever that the city Council be able to collect revenues in order to respond to the crisis and provide support to our most vulnerable citizens.