Individuals, companies or other organizations can invest in real estate in Zimbabwe through almost any type of vehicle. This includes investment through companies, partnerships, unit trusts, real estate investment trusts (REITs) and pension schemes as well as direct investment by individuals.
However, the choice of structure and choice of vehicle will have significant tax and other consequences. It is also possible to invest in property collectively, for example through a property investment fund or REIT.
Last modified 12 Jun 2024
The transfer of land which has already been developed by a registered property developer is subject to VAT at the rate of 15%. The purchaser pays the VAT.
Gains realized from the sale of real estate are subject to capital gains tax (CGT), calculated by the Zimbabwe Revenue Authority (ZIMRA) in terms of Section 6 of the CGT Act at the following rates:
The seller remits the capital gains tax from the purchase price received.
Share deals on listed securities are subject to capital gains withholding tax which will be withheld by the broker at the rate of 4% of the price, if such security was held for less than 270 days on the date of its sale and 1.5% of the price if the security was held for more than 270 days on the date of its sale.
Property acquired through donations is subject to capital gains tax. A detailed valuation report of the property should be submitted to Zimbabwe Revenue Authority.
A trust is assessable to capital gains tax on the sale of real estate.
Land and building transactions are subject to stamp duty payable by the purchaser at the standard rate ranging between 1% and 4%.
Acquisition of real estate for deceased estates is subject to estate duty, the amount is calculated in accordance with the Estate Duty Act.
Further, in terms of section 22G of the Finance Act [Chapter 23:04], an intermediated money transfer tax (IMTT) of 2% is payable on every electronic transaction done in Zimbabwe Dollars (ZiG). Any transaction exceeding equivalent in ZiG of USD500,000, has a maximum tax of USD10,150 (at the Interbank Rate) payable in ZiG. IMTT of 1% is levied on any electronic transaction done in USD. Any transaction exceeding USD500,000 has a maximum tax of USD10,150 payable in USD. The tax is payable by the purchaser upon making payment to the seller or the seller’s conveyancers. Payments from the conveyancer’s trust account to the seller are exempt from the tax in terms of the Thirtieth Schedule of the Income Tax Act [Chapter 23:06].
Last modified 12 Jun 2024
VAT is payable on the acquisition of real estate from a property developer when the developer is a VAT-registered taxpayer.
VAT is recoverable through input tax claims.
Last modified 12 Jun 2024
Stamp duty is payable by the purchaser at a sliding scale rate of between 1% to 4% of the purchase price.
The transfer to title fees payable by the purchaser are determined by the Law Society of Zimbabwe at a fixed tariff and are payable at a rate of 3% of the purchase price or 3% of the value of the property, whichever is the greater. The purchaser pays transfer fees unless otherwise agreed by the parties.
In a case of new land development, deduction fees are payable to the Surveyor General’s office and are calculated according to size of the land.
City Council rates/bills also have to be cleared before a transfer can be processed and are charged three months in advance.
Trading licences must also be paid in cases where business will be carried out.
Other fees for professional advisors eg accountants or land inspectors.
Last modified 12 Jun 2024
There are no ongoing taxes levied by the revenue authority. The Municipal authority does however have the authority to charge property taxes, however this varies depending on the location of the property.
Last modified 12 Jun 2024
Municipal rates are paid on a monthly basis to the local municipality council.
Last modified 12 Jun 2024
Income can be generated from the ownership of real estate through:
Last modified 12 Jun 2024
Income derived from letting property is subject to income tax, levied at the rate of 25% in terms of the Income Tax Act [Chapter 23:06].
Wealth Tax is a new tax levied at a rate of 1% of the value of a property other than a principal private property of a taxpayer, if such value exceeds USD250,000. The maximum tax liability on any one taxable property shall be USD50,000 per annum. The collection of the wealth tax will be done by ZIMRA with assistance from local authorities.
Last modified 12 Jun 2024
The distribution of dividends to non-resident shareholders is subject to non-resident withholding tax at the rate of 10% for dividends from listed shares and 15% for other dividends, unless an applicable tax treaty reduces the tax to a lower level.
Last modified 12 Jun 2024
There are no other costs of receiving income.
Last modified 12 Jun 2024
There are no such other costs.
Last modified 12 Jun 2024
Gains realized from the sale of real estate are subject to capital gains tax (CGT), calculated by the Zimbabwe Revenue Authority (ZIMRA) in terms of Section 6 of the Capital Gains Tax Act [Chapter 23:01] at the following rates:
Companies can offset or reduce tax as provided by Section 15 of the Capital Gains Tax Act when transferring property between companies under the same control. Further, in terms of section 10 of the Capital Gains Act receipts and accruals of a licensed investor from the sale of a property forming the whole or part of the investment to which his investment licence relates are exempt from payment of CGT. A licensed investor is a foreign investor who has obtained a licence from the Zimbabwe Investment Development Authority to invest in Zimbabwe excluding investors in the mining sector.
In addition, in the event that the individual disposing of the property is over the age of 55 and the property is his or her principal private residence then the proceeds from the disposal of the sale may are exempt in terms of section 10 of the Capital Gains Tax Act.
The amount of CGT payable may also be reduced by expenditure incurred on the acquisition or construction of properties that are sold during that year of assessment. Further expenditure incurred on additions, alterations or improvements to properties which are not deductible from gross income in terms of the Income Tax Act [Chapter 23:06] may be deducted from CGT.
Last modified 12 Jun 2024
Stamp duty is payable by the purchaser at a sliding scale rate of between 1% to 4% of the purchase price.
The transfer to title fees payable by the purchaser are determined by the Law Society of Zimbabwe and are payable at a rate of 3% of the purchase price or 3% of the value of the property, whichever is the greater. The buyer pays transfer fees unless otherwise agreed by the parties.
In terms of section 22G of the Finance Act [Chapter 23:04], an intermediated money transfer tax (IMTT) of 2% is payable on every electronic transaction done in Zimbabwe Dollars (ZiG). Any transaction exceeding equivalent in ZiG of USD500,000, has a maximum tax of USD10,150 (at the Interbank Rate) payable in ZiG. IMTT of 1% is levied on any electronic transaction done in USD. Any transaction exceeding USD500,000 has a maximum tax of USD10,150 payable in USD. Payments from the conveyancer’s trust account to the seller are exempt from the tax in terms of the Thirtieth Schedule of the Income Tax Act [Chapter 23:06].
In a case of new land development, Deduction Fees is payable to the Surveyor General’s office and is calculated according to size of the land.
City council rates/bills also have to be cleared before a transfer can be processed and are charged three months in advance.
Trading licences must also be paid in cases where business will be carried out.
Other fees for professional advisors eg accountants or land inspectors.
Last modified 12 Jun 2024
How can investment in real estate by an individual/organization/company be set up?
Individuals, companies or other organizations can invest in real estate in Zimbabwe through almost any type of vehicle. This includes investment through companies, partnerships, unit trusts, real estate investment trusts (REITs) and pension schemes as well as direct investment by individuals.
However, the choice of structure and choice of vehicle will have significant tax and other consequences. It is also possible to invest in property collectively, for example through a property investment fund or REIT.
Last modified 12 Jun 2024