REALWorld Law

Taxes

Taxation of acquisitions

What taxes are payable in relation to the purchase of real estate via the various types of corporate vehicle available and who is responsible for the payment of these taxes?

Angola

Angola

The purchase of a real estate in Angola is subject to transfer tax (SISA) as well as stamp duty.

The purchase of a real estate is subject to SISA at a rate of 2 percent (levied on the acquisition amount when equal to or higher than the value registered in the land register). Additionally, it is also subject to stamp duty at a rate of 0.3 percent (levied on the acquisition amount). Stamp duty is also due for the execution of a sale and purchase deed at a fixed amount of AOA2,000.

The first transfer of a property (as long as the price is below a certain threshold) may be exempt from SISA as long as the property is exclusively for personal and permanent residence purposes. Long-term leases (exceeding 20 years) also trigger the payment of SISA, as well as the execution of a promissory sale and purchase agreement, which includes the transfer of use.

The purchaser is responsible for the payment of the SISA and stamp duty.

Typically, share deals do not trigger the payment of SISA. However, in the event that the purchaser ends up holding more than 50 percent of a company holding real estate and does not prove that the main purpose of the operation is not the acquisition of the immovable properties then SISA is due.

Australia

Australia

Stamp duty is payable in all Australian States and Territories on the purchase of Australian real estate, including the following types of duty:

  • Transfer or conveyance duty (up to 7 percent) on the purchase of real estate, which is generally payable by the purchaser. The amount of duty will depend on the dutiable value of the real estate (the greater of its unencumbered value and the consideration paid) and the Australian State or Territory in which the property is located. Foreign purchasers of residential property (including residential development sites) may be subject to foreign purchaser additional duty in Victoria (at 7 percent), New South Wales (at 4 percent) and Queensland (at 3 percent), which is payable in addition to the standard rates of transfer/conveyance duty payable.
  • South Australia has announced a three-year phase out of conveyance duty on non-residential, non-primary production real property which commenced from 7 December 2015.
  • Landholder duty (up to the same rates as transfer/conveyance duty) may be payable by the purchaser on the acquisition of a significant interest in an entity that holds Australian real estate (ie indirect acquisitions) depending on the Australian State or Territory in which the property is located and the value of the real estate owned by the entity. Duty is generally payable by the purchaser, but in certain circumstances the entity itself can become liable to the duty.

Goods and Services Tax (GST), similar to VAT in Europe, of 10 percent may also be payable.

Belgium

Belgium

Sale of shares

The sale of shares in a company holding real estate will normally not be considered to be a sale of the real estate itself. No transfer tax (VAT or registration duties) is therefore due. Existing anti-abuse rules should, as a general rule, not affect share purchases. Exceptionally, certain share deal structures could possibly fall within the scope of these measures.

Sale of real estate assets

The transfer of ownership or the disposal of real estate interests in Belgium is either subject to registration duties or to VAT. These two taxes do not apply cumulatively.

A 12.5 percent registration duty (10 percent in the Flemish region) is generally payable by the buyer and calculated on the basis of the contractual price or the market value, whichever is higher. Reduced rates and exemptions may apply in function of the nature of the buyer and the type or size of the property.

A reduced rate (4 percent in the Flemish region, 5 percent in the Walloon region and 8 percent in the Brussels region) is available for professional sellers provided that certain conditions are met, among which the obligation to buy and sell a number of properties within a certain period of time.

Restitution of paid registration duties can be obtained if a property is re-sold within two years, depending on the region where the property is located, as from the signature of the notary acquisition act (36 percent in the Brussels region and 60 percent in the Flemish and the Walloon Region).

Where a company finances the purchase by a loan, a mortgage may be created over the property. The following indirect taxes are payable on the subscription of a mortgaged loan:

  • 1 percent registration duty calculated on the amount of the guaranteed debt
  • 0.3 percent mortgage tax calculated on the same basis
Bosnia-Herzegovina

Bosnia-Herzegovina

In the Federation of Bosnia and Herzegovina, the sale of real estate is taxed at a level set by each canton individually.

The tax rate is usually 5 percent of the value of the real estate, as determined by the appraisal team for the municipality. This tax is paid usually by the buyer and cannot be reduced.

Canada

Canada

No Canadian federal or provincial income tax applies to the acquisition of real estate.

Certain provinces levy tax on the registration of an interest in real property in the relevant provincial land titles office. At least one Canadian city, Toronto, levies a similar registration tax in addition to the provincial tax. Ontario levies an additional 15% registration tax on foreign purchasers of residential real estate in the Toronto region, and British Columbia levies an additional 20% registration tax on foreign purchasers of residential real estate in the Vancouver region and in certain other specified areas in British Columbia.

China

China

Property transfer

In a property transfer, the taxes paid by the purchaser of real estate are as follows:

  • Deed Tax: 3 to 5% of the purchase price, and
  • Stamp Duty: 0.05% of the purchase price

Individual buyers may enjoy a favourable deed tax rate or be exempted from paying the stamp duty provided that required conditions have been satisfied.

In a property transfer, the taxes payable by the seller of real estate are as follows:

  • Stamp Duty: 0.05% of the purchase price
  • Land Value Added Tax: Progressive scale ranging from 30% to 60% depending on the amount of taxable gains derived from the transfer of real property
  • Value Added Tax: 11% of the gross sales proceeds which will be passed through to the purchaser to pay. If the real estate properties were acquired by the seller before 30 April 2016, the seller may opt for a simplified tax method, ie apply a reduced VAT rate of 5% on the gross sales proceeds which will be borne by the seller itself, and
  • Income Tax (for enterprise): 25% of net profit (consolidated with the enterpriseʼs annual profit)

Share transfer

In a share transfer, the taxes paid by a purchaser of a real estate company are as follows:

  • Stamp Duty: 0.05% of the share transfer price

In a share transfer, the taxes paid by a purchaser of a real estate company are as follows:

  • Stamp Duty: 0.05% of the share transfer price
  • Income Tax (for enterprise): 25% (consolidated with the enterpriseʼs annual profit)
Croatia

Croatia

From 1 January 2015 any acquisition of a building and/or a development site from a VAT payer is subject to VAT at the rate of 25%. This rule applies to buildings, which are new, ie have not been in use since their construction and buildings in respect of which the time elapsed since their first use up to the sale is two years or less. Acquisitions of “old” (used) buildings, ie those which do not fall into the above categories, are subject to land transfer tax unless both parties (being VAT payers) agree on VAT and reverse charge. Acquisitions of land which is not a development site are either subject to VAT (if the buyer is also a VAT payer and both the seller and the buyer agree to apply VAT) or land transfer tax. VAT is paid by the buyer.

Acquisition of real estate assets that are not subject to VAT are subject to real estate transfer tax at the rate of 4% (since 1 January 2017). Real estate transfer tax is payable on the market value of the property and the tax authorities have the right to perform their own assessment of this if appropriate. Generally, real estate transfer tax is paid by the buyer. However, the seller is also a guarantor for the payment.

Exemptions from real estate transfer tax (if applicable) apply in the following cases:

  • A transfer of real estate made as a contribution to the registered capital or to the capital reserves of a company.
  • A transfer of real estate owned by a company as part of a merger, division or restructuring process.

Real estate cannot be contributed to the share capital of a closed end real estate investment fund, so this exemption from real estate transfer tax does not apply to these funds.

Czech Republic

Czech Republic

Transfers of real estate are, generally speaking, subject to VAT and income tax and specifically real estate acquisition tax. In the case of the real estate acquisition tax, when it concerns the acquisition by purchase or exchange, the transferee (purchaser) being the new owner of the real estate asset is assessed for the tax. Real estate acquisition tax amounts to 4 percent of either the purchase price or the value of the real estate as determined by an official assessment, whichever is higher. Opposed to the past regulation, the parties are not entitled to agree that the tax will be paid by the other party.

Besides the taxes mentioned above, Czech law provides for two other types of real estate tax payable annually, consisting of tax on land and tax on buildings or "units" (ie flats and retail units).

Denmark

Denmark

There are no taxes on the purchase of real estate in Denmark.

France

France

Generally, the purchase of property is subject to transfer taxes or value added tax (VAT) at the standard rate (20%) depending on whether the seller and the buyer are VAT taxpayers or not.

The VAT tax regime complies with EU directives. As a general rule, real estate properties are placed within the scope of the VAT standard regime and no longer subject to a specific regime.

The following rules apply to transactions entered into by a French SPV (registered for French VAT) and a seller registered for VAT:

  • Transactions involving non-developable land are exempt from VAT (unless an election for VAT to be payable is filed in which case the VAT is due on the total purchase price) and are subject to transfer tax at a rate between 5.09006% and 6.40665% , depending on the type and location of the land. A reduced rate of 0.71498% applies if an undertaking to re-sell the land within five years is made by the buyer. A €125 registration duty applies if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with the undertaking.
  • Transactions involving developable land are subject to VAT on the total price where VAT on the acquisition cost was deducted when the land was acquired by the seller and are subject to transfer tax at a rate of 0.71498 % (or a fixed fee of €125 if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with the undertaking). Where VAT on the acquisition cost was not deducted when the land was acquired by the seller VAT is payable by the seller on any capital gain realized. In addition, transfer tax is payable at a rate between 5.09006% and 6.40665%, depending on the type and location of the relevant property (or a reduced rate of 0.71498% if a commitment to re-sell the land within five years is made by the buyer, or a €125 fixed fee if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with the undertaking).
  • Transactions involving new buildings for VAT purposes (ie a building is considered as "new" for VAT purposes when it is acquired less than five years after its completion from a VAT-liable acting as such. Moreover, pursuant to Article 257-I-2-2° of the French Tax Code, works carried-out on an existing building consisting in an increase in height (surélévation) or a refurbishment (remise à l'état neuf) is assimilated to the delivery of a new building, subject to certain conditions), including transaction involving a new property known as a ‘sale before completion’ (Vente en l’état futur d’achèvement), are subject to VAT on the total purchase price and to transfer tax at 0.71498% (or a fixed fee of €125 if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with such undertaking).
  • Transactions involving other properties are exempt from VAT (unless an election for VAT to be payable is filed, in which case the VAT is due (i) on the total purchase price if the VAT incurred by the seller on the initial acquisition was deducted or, (ii) on the margin if the VAT incurred by the seller on the initial acquisition was not deducted and are subject to transfer tax at a rate between 5.09006% and 6.40665%, depending on the type and location of the relevant property (or a reduced rate of 0.71498% if the buyer commits to re-selling the property within a five-year period, or a fixed fee of €125 if the buyer commits to developing a building within a certain period).

Please note that, regardless of the buyer's registration in France for VAT, if the seller is not registered for French VAT, the transaction is not subject to VAT. Transfer taxes are due at the 5.09006% to 6.40665% normal rates specified above, unless the buyer is indeed registered for French VAT and undertakes either to re-sell or to erect a building (see the specifics above about these undertakings).

The transfer tax regime also differs if the seller is registered for VAT in France but the buyer is not: in this case, the benefit of the reduced rates of transfer taxes subject to the above mentioned undertakings are not available.

VAT can be recovered under certain conditions if the asset is used for a VATable activity (eg the building is rented under the VAT regime). VAT is recovered by offset against the VAT collected on the VATable activity or by claiming a reimbursement of VAT credit to the public Treasury. Foreign investors outside of the EU who are not registered for VAT in France must appoint a VAT representative in order to claim a VAT reimbursement.

Furthermore, notary fees are due at a rate of 0.814% on the sale's price. It is generally due by the buyer.

The sale of shares in a company holding real estate (where the value of the real estate represents more than 50% of the company’s assets) is subject to a transfer tax of 5% of the price paid for the shares or the fair market value if higher.

Moreover, transactions involving real estates or rights on real estates are subject to a real estate security contribution (contribution de sécurité immobilière) of 0.10% of the price paid for the real estate or for the rights on real estates.

Germany

Germany

VAT

In general, the acquisition of real estate is exempt from VAT. However, if both parties to the transaction are businesses, the seller can opt out of the VAT exemption. In this case VAT will apply at the rate of 19 percent. Opting out of the VAT exemption only makes sense where the seller has used or has intended to use the property for business activities that are subject to VAT. The VAT due on a real estate sale is subject to the reverse charge rule, ie the purchase price is a net price and the buyer will pay the amount due as VAT to the tax authority.

If the buyer is able to claim back the input VAT in full, no net VAT is ultimately payable on the transaction.

VAT paid on real estate transactions can be reviewed for a period of ten years. If the VAT status of a purchased building changes during this period (for example, if the building is no longer used for business activities subject to VAT) an adjustment will be made to the VAT initially reclaimed on the acquisition or construction of the building. The amount due is calculated pro rata over time.

Real estate transfer tax

A real estate transfer tax of 3.5 percent to 6.5 percent, depending on the German federal state in which the property is located, is generally payable on real estate transactions in Germany.

Direct investment

Real estate transfer tax applies to the direct purchase of a real estate asset, or to the grant or transfer of transferable building rights (Erbbaurechte). All parties involved in the real estate transfer agreement are generally liable for this tax, although the seller will normally insist on a clause which makes the buyer responsible for paying it.

Indirect investment through a partnership (a transparent entity)

The transfer of an interest in a partnership holding real estate triggers real estate transfer tax if 95% or more of the partnership interests are transferred within five years. The partnership is liable for paying the real estate transfer tax. Irrespective of this five year period, real estate transfer tax becomes due if at least 95% of the partnership interests are directly or indirectly held by one entity or individual for the first time.

Please note that a reformation of the German real estate transfer tax is currently under discussion. The reformation might lead to a reduction of the current 95% limit to a 90% limit and the extension of the holding period to ten years, instead of the current five-year period in the case of a transfer. However, no legislative proposal has been made so far. The entity/individual holding the interests is liable for paying the real estate transfer tax. For the purposes of these rules, indirect transfers or concentrations of partnership interests have to be taken into account. These rules also apply if partnership interests are transferred within the same group of companies.

There are strategies available to avoid real estate transfer tax eg if the seller remains as a partner in the partnership, holding a stake of more than 5% for more than five years and provided further that the purchaser directly or indirectly does not acquire more than 94.9% of the interest in the partnership.

Indirect investment through a corporation

The acquisition of real estate via a corporation triggers real estate transfer tax if at least 95% of the shares are held by one entity, individual, or group of related entities or individuals for the first time. The entity, individual or group holding these shares is liable for the real estate transfer tax. Again, indirect transfers or concentrations of shares have to be taken into account in principle.

As of January 2010 a new rule (§ 6a Real Estate Transfer Tax Act, RETTA) was introduced into the law which allows in certain circumstances an exemption from real estate transfer tax where there is a restructuring within a group of companies.

Potentially, there are strategies available to avoid real estate transfer tax, eg if a company is acquired by two independent buyers.

Hong Kong

Hong Kong

In Hong Kong, the transfer of real estate requires the paying of stamp duty regardless of whether the parties involved in the transfer are individuals or corporations. The obligation to pay stamp duty rests on both the vendor and purchaser but the commercial practice in Hong Kong is that the purchaser will usually be responsible for paying it.

The amount to be paid depends on the consideration/market value of the property at the time of the purchase. The latest applicable scales for the calculation of stamp duty in the purchase of real estate in Hong Kong are provided by the Hong Kong Inland Revenue Department Stamp Office.

Stamp duty

In Hong Kong, the transfer of real estate requires the payment of stamp duty regardless of whether the parties involved in the transfer are individuals or corporations. The obligation to pay stamp duty rests on both the vendor and purchaser but the commercial practice in Hong Kong is that the purchaser will usually be responsible for paying it. The amount to be paid depends on the consideration/market value of the property at the time of the purchase.

On 25 July 2014, the Hong Kong government adjusted the rates of ad valorem stamp duty ('AVD') and made AVD payable upon the signing of the agreement for sale in any property transaction. The adjustment to the AVD has retrospective effect to cover all property transactions properly executed on or after 23 February 2013. Please see this link to tables of the old AVD and new AVD rates on the Hong Kong Government website.

There are a number of exceptions to the application of the new AVD rates (in which case, the old AVD rates apply instead):

  • An acquisition of a residential property by a Hong Kong Permanent Resident ('HKPR') who does not own any residential property at the date of acquisitionand is acting on his/her own behalf
  • Two or more HKPRs acquiring a residential property jointly, where each purchaser is acting on their own behalf and do not own any residential property on the date of acquisition
  • A joint acquisition of a residential property by a HKPR and a close relative (ie spouse, parents, children, siblings) who is/are not HKPR(s) where each purchaser is acting on their own behalf and do not own any residential property on the date of acquisition
  • An acquisition or transfer of residential property between close relatives (whether HKPRs or not) who may or may not own any residential property
  • Nomination of a close relative(s) (whether HKPR or not) who own other residential property in Hong Kong at the time of nomination, to take up the assignment of a residential property
  • An acquisition or transfer of a property by court order or pursuant to a court order, including a foreclosure order
  • A transfer of a mortgaged property to a mortgagee which is a financial institution within the meaning of section 2 of the Inland Revenue Ordinance (Cap. 112) or to its appointed receiver, or
  • An acquisition of a propertyas replacement ofanother propertythat was acquired under various statutory schemes for urban redevelopment where the person is acting on his/her own behalf

Additionally, AVD does not apply in the following cases:

  • Nomination of a close relative(s) (whether HKPR or not) who do(es) not own any other residential property in Hong Kong at the time of nomination
  • Transfer of a property to a beneficiary of the estate of a deceased person in accordance with a will or the law of intestacy
  • The acquisition or transfer of a property by or to a body corporate from an associated body corporate
  • The acquisition or transfer of a property by or to the Government, or
  • A gift of a property received by a charitable institution exempted from tax under section 88 of the Inland Revenue Ordinance.

HKPRsmainly include holders of valid Hong Kong Permanent Identity Cards as defined under the Registration of Persons Ordinance (Cap. 177). This definition also extends to Buyer's Stamp Duty (see below).

Buyer's stamp duty

The government of Hong Kong has introduced Buyer's Stamp Duty ('BSD') which took effect on 27 October 2012. Unless exempted, BSD is imposed on all residential properties acquired on or after the effective date by any person (including a company incorporated) other than a HKPR. It is charged at a flat rate of 15% on the stated consideration or the market value of the property (whichever is the higher), and is payable in addition to the AVD and special stamp duty (please see section on 'Special Stamp Duty' below), if applicable.

The buyer or the transferee is liable to pay the BSD within 30 days after the execution of the chargeable document (eg a provisional agreement of sale and purchase. If the time for stamping of any instrument chargeable with BSD falls before the amended Stamp Duty Ordinance was published in the Gazette, that time for payment is to be replaced by a period of 30 days commencing immediately after the date of Gazette.

BSD will be exempted in a number of situations. Below are the circumstances in which the Government will grant an exemption:-

  • Acquisition by a HKPR jointly with a close relative(s) (ie spouse, parents, children, brothers and sisters) who is/are not HKPR, where each of the purchasers is acting on his/her own behalf
  • Transfer of property to a close relative who is not a HKPR, or to close relative(s) jointly one or more of whom not being HKPR, where each of the transferees is acting on his/her own behalf 
  • Nomination of a close relative(s) who is/are not HKPR to take up the assignment, where each of the nominees is acting on his/her own behalf 
  • Addition/deletion of name(s) of person(s) who is/are not HKPR to/from a chargeable agreement for sale or a conveyance on sale in respect of a residential property if the person(s) is/are a close relative(s) of the original purchaser(s), where each of the persons is acting on his/her own behalf 
  • Acquisition or transfer by or to a purchaser or transferee by a court order which includes a foreclosure order obtained by a mortgagee whether or not it falls under the definition of a financial institution within the meaning of section 2 of the Inland Revenue Ordinance (IRO) 
  • Acquisition or transfer of a mortgaged residential property by or to a mortgagee which is a financial institution within the meaning of section 2 of the IRO, or by a receiver appointed by such a mortgagee
  • Acquisition or transfer by or to a body corporate from another associated body corporate 
  • Acquisition of residential properties by persons to replace residential properties under various statutory schemes for urban redevelopment where the person is acting on his/her own behalf 
  • Acquisition or transfer of residential properties by or to the government, and  
  • Gift of residential properties to charitable institutions exempted from tax under section 88 of the IRO.
Hungary

Hungary

The acquisition of real estate in Hungary as part of a purchase, exchange or similar transaction is normally subject to real estate transfer tax, payable at 4% of the market value. A reduced rate of 2% applies to the value above HUF1 billion. Nevertheless, the transfer tax payable cannot exceed HUF200 million per real estate. The tax authority will normally accept the consideration stated in the transfer agreement as the market value unless it is obviously too low.

The main exceptions to the general transfer tax rate are:

  • a 2% rate applies to the purchase of property by Hungarian real estate funds;

  • a 2% or 3% rate applies to the purchase of property by certain property dealers and finance lease providers (providing the property is sold/leased within two years); and

  • a 2% rate applies if the property is purchased by a REIT (real estate investment company) or one of its wholly owned special purpose vehicles.

The acquisition of 75% or more of the shares (including shares held by close relatives, related parties, etc) in a company holding Hungarian real property is subject to transfer tax provided that the balance sheet value of the company's Hungarian real property (or properties) exceeds 75% of the company's total balance sheet value (subject to certain adjustments). In such cases the general tax rate, ie 4% applies. Nevertheless:

  • a reduced rate of 2% applies to the value above HUF1 billion, and the transfer tax payable cannot exceed HUF200 million per real estate asset, and
  • if the acquirer is a REIT (real estate investment company), a reduced 2% rate applies (regardless of value)

The definition of a company holding Hungarian real property also includes companies which themselves are not owners of real property, but have, directly or indirectly, an equity interest of at least 75% in another company (other companies) owning Hungarian real property. If no adjustment applies as prescribed by the Duties Act, the tax base is the market value of the real property (or properties) owned by the acquired entity (or entities) in proportion to the shares held by the acquirer.

The transfer tax is paid by the buyer.

Ireland

Ireland

The direct acquisition of real estate in Ireland by an individual, partnership or a company will give rise to a stamp duty liability. The rate is 6% for commercial real estate. The rate of stamp duty on residential real estate is 1% on the first €1 million and 2% on any balance over €1 million. Stamp duty is normally paid by the buyer.

VAT may also be payable at the rate of 13.5% on completion of the transaction where there is a direct acquisition of real estate. This is determined on a case‑by‑case basis as each property has its own VAT history recording previous usage and the VAT status of the seller. A buyer may be entitled to recover VAT, depending on the buyer's VAT status and the purpose for which the property is used.

The indirect acquisition of real estate in Ireland through the acquisition of shares in an Irish special purpose vehicle company may be subject to stamp duty at the rate of 6% where the shares derive their value wholly or partly from the underlying real estate, which is normally paid by the buyer. If the acquisition is structured through a share subscription and redemption of shares in an Irish corporate vehicle, stamp duty may be avoided.

No VAT is payable on the acquisition of shares.

Where there is an indirect acquisition of real estate in Ireland one must consider whether there are any latent gains or losses attached to the real estate. In the case of latent losses, there are certain rules which restrict capital loss buying which must be considered.

The disposal of the real estate may give rise to capital gains tax for the vendor, currently at the rate of 33%, regardless of where the vendor is resident. However, there is a relief from capital gains tax for real estate purchased from 7 December 2011 to 31 December 2014, provided it is held for a period of four years. Any gain on real estate purchased in this period which is attributable to the first four years of ownership will not attract capital gains tax. For example, where real estate is acquired in this period and held for 10 years, four tenths of the gain should be exempt. In order for the relief to apply, the property must be acquired for a consideration equal to the market value of the property (or if acquired from a relative, not less than 75% of the market value on the date acquired). This exemption applies to all persons regardless of how the real estate is acquired, ie individual or corporate.

The disposal of shares in a company which derives its value or the greater part of its value from Irish real estate may also give rise to capital gains tax for the vendor, currently at the rate of 33%, regardless of where the vendor is resident. The relief from capital gains tax in respect of real estate purchased up to 31 December 2014 does not extend to the disposal of shares in a company which derives its value or the greater part of its value from Irish real estate.

Italy

Italy

Sales of residential real estate made by VAT-liable entities are normally exempt from VAT. Residential sales are only subject to VAT if the seller is a construction company that has procured or renovated the property less than five years before the sale takes place, or after five years, if the construction company opts in the deed of sale for VAT to apply. VAT is payable at the rate of 10% (22% if the real estate is registered as a luxury dwelling).

The sale of commercial real estate (including offices and industrial property and sales of retail properties and hotel buildings separately from any associated businesses) is subject to VAT at the rate of 22% (10% in the case of renovated properties if sold by the entity performing the renovation works) if:

  • the seller is a construction company that procured or renovated the property less than five years before the sale, and
  • (in any event), if the seller opts in the relevant transfer deed for the VAT tax regime to apply.

VAT-exempt residential transactions are subject to the following transfer taxes:

  • Registration tax at 9%, and
  • Cadastral and mortgage taxes equal to €50 each.

Sales of residential property which are subject to VAT are subject to registration, mortgage and cadastral tax at fixed amounts of €200 for each type of tax.

Sales of commercial property, whether or not they are exempt from VAT (except where the seller is an individual), are subject to the following transfer taxes:

  • Registration tax of €200
  • Cadastral tax at 1%, and
  • Mortgage tax at 3%

For acquisitions of commercial property by Italian real estate investment funds and listed real estate investment companies (SIIQs) the rates of cadastral tax and mortgage tax are halved to 0.5% and 1.5% respectively.

In the case of retail property or hotels, if any licences or other intangible assets are included in the sale, then the buyer is regarded as purchasing a going concern, since the building is part of a business and the activities on the premises are carried out by means of authorizations held by the owner. The sale of a going concern is not subject to VAT, although registration tax applies as follows:

  • real estate – 9% applied to the net value of the property, and
  • other assets (not including receivables) – 3% of the net value

The sale of real estate as a going concern is subject to mortgage tax and cadastral tax payable at a fixed amount of €200 each.

The buyer normally pays the transfer tax but both the seller and the buyer are liable for the payment and for any assessment by the tax authorities. VAT is also paid by the buyer, who can reclaim it by offsetting the VAT due to the tax authorities against its output operations. In some circumstances, a VAT credit can also be obtained.

EU-resident entities may request a refund of VAT paid if certain conditions are met. If the entity is not resident in the EU then it must register for VAT in order recover any VAT incurred.

Special rules apply to the transfer of property into a real estate fund in exchange for units if the real estate has mostly been leased to tenants.

Where real estate is acquired by way of shares in the corporate vehicle holding the asset, the transaction is normally VAT exempt. The transfer will, however, be subject to registration tax of €200.

Japan

Japan

Real Property Acquisition Tax (fudousan shutoku zei)

Real property acquisition tax is levied on the acquisition of land or buildings; however, an acquisition by merger of real estate-owning company is exempt.  The tax base is the value of the real estate listed in the official ledger, which is in many cases lower than the market value.  The tax base can be reduced under the GK-TK or TMK structures when certain requirements are satisfied.  Currently, the tax rate is 3% on land and dwellings, and 4% on buildings other than dwellings.

The designated taxpayer for this tax is the acquirer of the real estate.

Under a plain interpretation of the statute, an acquisition of entrusted real property through TBI is not subject to this tax.  To our knowledge, the tax authorities have not attempted to assess real estate acquisition tax on the transfer of TBI to date.

Registration and License Tax (touroku menkyo zei)

Registration is necessary for an acquisition of real estate or TBI for perfection purposes.  The registration tax is levied on real estate transactions such as the purchase of real estate or the construction of a building.  The registration and license tax for purchase of land, for example, is currently 1.5% of the value listed in the official ledger.  Reduced tax rates can be applicable to a GK-TK and a TMK when certain conditions are satisfied.

Seller and purchaser are both legally subject to registration tax, however, a purchaser often bears the registration tax in practice.

Stamp Tax

Any documents listed in the Stamp Duty Act are subject to stamp tax to the extent it is executed in Japan.  Contracts for the transfer of real estate or land leases are subject to stamp tax.  The tax amount varies depending upon the amount stated in the conveyance or lease document (eg the tax amount is JPY100,000 when the stated amount is in excess of JPY100 million but less than 500 million. Mitigation treatments are not considered.)  Meanwhile, a trust agreement or contract for a TBI transfer is also subject to stamp tax and the tax amount is only JPY200 regardless of the amount stated in the agreement.

Stamp tax is paid by affixing a fiscal stamp on the documents and sealing it with a certified stamp.  Seller and purchaser are both legally subject to stamp tax and the party bearing the cost is often decided by agreement between the parties.

Netherlands

Netherlands

The following indirect taxes may apply where the real estate is acquired directly (an asset deal):

  • Value Added Tax (VAT; belasting toegevoegde waarde or btw)
  • Real estate transfer tax (RETT; overdrachtsbelasting)

In addition, charges (kadastrale rechten) can be levied by the Land Registry.

Where property is acquired by buying the shares in an existing company which holds the real estate (a share deal), RETT may apply.

Not all taxes apply to all investment structures.

RETT can be payable in relation to both asset deals and share deals. Real estate share deals are situations where the company being acquired qualifies as a 'real estate company' namely if at least 50 percent of its assets consist of real estate (either in the Netherlands or abroad) and that real estate is mainly (70 percent or more) instrumental in the trading of and/or development of real estate, and 30 percent of those assets are located in the Netherlands.

RETT is paid by the buyer. An exemption is sometimes available eg if newly built real estate or building land is purchased and VAT is payable.

The rate of the RETT is 6 percent, unless residential property is involved. For residential property (houses, apartments etc) the transfer tax is at a rate of 2 percent in order to encourage the buying of houses by individuals.

Nigeria

Nigeria

The various taxes that apply on real estate transfer transaction includes Capital Gains Tax (CGT), Stamp Duties and Value Added Tax (VAT) (where the property is not undeveloped land).

Capital gains realised on the sale of real property is subject to CGT and payable by the seller of real estate. The rate under the Capital Gains Tax Act is 10% of the gains from the sales. In reality the tax authorities (Federal Inland Revenue Service) decides the amount payable on a ‘best of judgment assessment’ basis which uniformly is about 1% of the value of the property. All deeds for transfers of interests in real property are required to be stamped under the Stamp Duties Act and the purchaser or assignee is responsible for this payment. The Federal Inland Revenue Service (FIRS) assessed rates for stamping of transfer documents for is 1.5% for transactions involving a corporate entity. A different tax regime and rates apply to transfer transactions where individuals are parties and the rates vary within the 36 States in Nigeria. In Lagos State the rates payable CGT and Stamp Duties is currently 0.5% of the property value.

Norway

Norway

Stamp duty is normally payable on the transfer of title of real estate located in Norway whether commercial, residential or industrial at the rate of 2.5 percent of the sale value of the property. Normal arm’s-length conditions apply to calculating the sale value. The transfer of shares in limited liability companies and partnerships owning real estate is not subject to stamp duty. A transfer of real estate through the merger or de-merger of a limited company is also exempt from stamp duty.

A minor registration fee of approximately €60 is payable in order to obtain legal protection for the right of ownership.

The buyer is responsible for paying stamp duty and registration fee.

Poland

Poland

In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), where the seller is not an entity carrying on a business, a 2% tax on civil law transactions (PCC) is due, based on the market value. This is normally the purchase price but can sometimes be assessed at a higher level by the tax authorities using an authorized expert's opinion. The obligation to pay PCC rests with the buyer. If the seller is an entity carrying on a business, value added tax (VAT) is usually payable. Generally, the standard rate of 23% applies. With respect to subsidized housing a rate of 8% applies.

In principle, VAT charged by the seller can be recovered by the buyer as input VAT (if the purchaser is a VAT taxpayer carrying out transactions which are subject to VAT). If a sale is subject to VAT, PCC is not due. The sale of agricultural land is exempt from VAT (but in such cases 2% PCC is due).

Any sales of real property other than land are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances, the seller may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.

If a sale is exempt from VAT, it is subject to tax on civil law transactions (PCC) at a rate of 2%.

In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), PCC at 1%, calculated on the basis of the fair market value of the shares, is payable by the acquiring party. Similarly, if an interest in a partnership is purchased (ie a partnership holding the interest in the real estate), PCC at 1%, calculated on the basis of the market value of the interest, is payable.

Portugal

Portugal

The following taxes may apply to the purchase of real estate, depending on the structure of the deal.

Asset deals:

  • Municipal Property Transfer Tax (IMT)
  • VAT (IVA)
  • Stamp duty (Imposto do Selo)

Share deals:

  • Municipal Property Transfer Tax (IMT)

Asset deals 

Municipal Property Transfer Tax (IMT) will be calculated on the price of the transaction or on the 'VPT' (value of the real estate assessed by the Tax Authority, which currently tends to correspond to the market value, subject to certain concessions), whichever is higher.

IMT is calculated using the following formula:

(Taxable value x Rate) – Threshold deduction = IMT to be paid

IMT is charged at the following rates:

  • Flat rate of 6.5% on the sale or transfer of any urban property not exclusively of a residential nature
  • Flat rate of 5% for rural properties
  • Progressive rates for the sale and transfer of urban buildings or apartments exclusively for residential purposes that are intended to be the buyer's permanent residence, ranging from 0%to 6% as mentioned in below: 
Taxable value (€) Rate (%) Threshold deduction (€)
Up to 92,407 0 0
92,408 to 126,403 2 1,848.14
126,404 to 172,348 5 5,640.23
172,349 to 287,213 7 9,087.22
287,214 to 574,323 8 11,959.26
Above 574,323 6 0
  • Progressive rates for the sale and transfer of urban buildings or apartments exclusively for residential purposes and/or intended for letting purposes, but not intended as the buyer's permanent residence, ranging from 1% to 6% as mentioned in below: 
Taxable value (€) Rate (%) Threshold deduction (€)
Up to 92,407 1 0
92,408 to 126,403 2 924.07
126,404 to 172,348 5 4,716.22
172,349 to 287,213 7 8,163.09
287,214 to 550,836 8 11,035.30
Above 550,836 6 0

To discourage the purchase of real estate in Portugal through offshore companies, IMT is levied at a rate of 10% if the buyer is a company established in a country, territory or region whose tax regime is deemed to be clearly less onerous. In this case, no exemptions are made available.

Since 2016 the acquisition of real estate by open-end or privately placed closed-end Real Estate Investment Funds or Retirement Savings Funds are no longer be exempt from IMT.

However, the property deals may be exempt from IMT or may benefit from tax reliefs in the following cases, among others:

  • Property acquisition for resale
  • Acquisition of urban property for urban regeneration purposes
  • Acquisition of urban property or units intended to install tourism developments to which has been attributed tourism utility
  • Acquisition of real estate by real estate investment funds for residential letting
  • Restructuring operations or cooperation arrangements. Acquisition of property classified as of national/public/municipal interest
  • Exemption or reduction of the IMT tax rates, regarding the acquisition of property that constitutes eligible investment under the Investment Promotion Tax Regime (RFAI)

Real estate owned by open-ended or publicly offered closed-end Real Estate Investment Funds (REIFs), pension funds, or retirement funds will no longer benefit from the current 50% IMI exemption.

The transfer of property is also subject to a flat rate of 0.8% of stamp duty. Stamp duty will be calculated on the price of the transaction or on the VPT, whichever is higher.

Although, as a rule, the transfer of property and shares in Portugal is exempt from VAT, transfers of property can be subject to the tax. A seller may waive the exemption if certain conditions have been met and they have complied with various formalities.

If the exemption is waived, VAT can be recovered in accordance with provisions in the Portuguese VAT code.

Share deals

In the case of a share deal, IMT only applies to the purchase of an equity position in a private limited liability company or a privately placed closed-end REIF, which holds real estate assets located in Portugal. IMT will be due if, after the acquisition, the acquirer holds 75% or more of the company's total equity.

If the purchase of shares involves a corporation or a joint-stock company, the transaction is not subject to IMT or stamp duty. The same also applies to the purchase of an equity participation in a private limited liability company (or in a privately placed closed-end REIF) if the participation represents less than 75% of the total equity.

In both cases – asset deals and share deals ― the buyer is responsible for the assessment and payment of IMT, as well as VAT (reverse charge mechanism), if applicable. IMT must be paid before the deed and the notary is obliged to confirm its payment.

Stamp duty, where applicable, is paid by the buyer (who normally also pays the notary's fees). The buyer must present the payment proof to the notary at the moment of the transfer signature. The tax is paid through a document issued by the tax authority (the buyer can issue the document in the tax authority website or request it in a tax authority service. Also, the attribution of immovable property by means of reimbursement in kind of participation units, arising from the liquidation of private issue closed-end real estate investment funds, is subject to IMT.

The same is applicable to the transmission of immovable property arising from the merger of the referred kind of Funds.

Romania

Romania

Real estate transfer tax

Romania does not levy any stamp or transfer tax on the transfer of real estate. Nonetheless, the purchase of real estate in Romania involves several costs such as notary's fees and land book registration fees.

Income tax

When real estate is purchased from individuals a special income tax is due for such acquisition. This is similar in nature to a transfer tax. The tax is payable by the individual transferring the ownership or other dismemberments of the real property right and is calculated by applying a rate of 3 percent on the taxable income, which is determined by deducting from the transaction value the amount of RON 450,000 (ie approx. EUR 100,000) which is non-taxable.

The value on which the tax is levied is the transaction value set forth by the parties through the transfer documents. If such value is under the minimum value set out in the valuation records kept by the notaries public, the notary public shall notify the tax authorities with regard to the transaction.

This income tax is payable by the seller and must be paid to the notary public before the transfer agreement is authenticated. The tax is not due upon acquisitions made from legal entities or self-employed persons which are registered with the tax authorities and pay general income tax.

Withholding tax

Non-resident entities and individuals are subject to a 16 percent withholding tax (if there is no overriding legislation and there are no overriding provisions in applicable double-tax treaties) on certain types of income derived from Romania, such as: capital gains, interest and royalties, commissions, income from management and consultancy services (irrespective of where the services are performed) or from other services provided in Romania and income derived by non-residents from the liquidation of a Romanian legal entity. The withholding tax applicable for income derived from dividends is 5 percent, while for certain other income derived by non-resident individuals the applicable withholding tax rate is 10 percent as of 1 January 2018.

The withholding tax is usually reduced or eliminated by double-tax treaties (at present, Romania is a party to more than 85 double-tax treaties which usually follow the OECD model), where a valid fiscal residence certificate is made available by the non-resident beneficiary of the income at the moment when the payment is made. Also, for certain types of revenue (i.e. dividends, interest, royalties), the withholding tax rates can be reduced to nil if the relevant legal conditions are met. In addition, in case the national legislation, the EU legislation or double-tax treaties provide different rates of withholding tax for the same income, the applicable withholding tax will be the one which is favourable for the payer (if the payer proves that it has the residence in a state which signed with Romania a treaty for reduction of double taxation and, when the case, proved that the requirements of the EU legislation are met)

Russia

Russia

Russia does not impose any real estate transfer taxes. In the event of an indirect purchase of real estate by virtue of purchasing shares or a participatory interest in a local company, no direct tax is usually payable by the buyer.

If a seller - a foreign legal entity - has no tax registration in Russia, the buyer may be required to withhold income tax from the proceeds (profits) from a sale of real estate or of non-listed shares in a Russian legal entity holding real estate.

The tax is payable at a rate of 20 percent on the proceeds of the sale of non-listed shares in a Russian or foreign legal entity where more than 50 percent of the company's assets consist directly or indirectly of real estate located in Russia; or on the proceeds of the sale of real estate in Russia. The relevant taxable income is generally calculated as the excess of the proceeds received from the sale of shares or real estate over the documented expenses incurred by the seller in the acquisition and sale of the shares or real estate provided that the foreign seller submits documents to the Russian buyer confirming the deductible expenses prior to receiving the proceeds.

A relevant double tax treaty may provide for a reduction in or exemption from withholding tax subject to the treaty clearance procedure.

If a seller is a Russian legal entity or an individual, the buyer will not be required to withhold either corporate income tax or personal income tax.

Slovak Republic

Slovak Republic

Donation tax and inheritance tax were abolished from 1 January 2004. Real estate transfer tax was repealed from 1 January 2005.

Therefore, generally speaking, real estate owners in Slovakia are subject to income tax, real estate tax, and VAT. Real estate tax is “local” because it is set by the municipality.

Spain

Spain

Asset deals are subject to:

  • VAT (Impuesto sobre el Valor Añadido, IVA) as well as stamp duty (Actos Jurídicos Documentados) or to
  • Transfer tax (Transmisiones Patrimoniales Onerosas)

In both cases tax on the increase in the value of urban land (Impuesto sobre el Incremento de Valor de los terrenos de Naturaleza Urbana) if urban land is transferred

The transfer of land for development or land which has already been developed is subject to VAT at the rate of 21%, except in the case of residential property. With regards to residential property the rate of the VAT applicable to an acquisition is 10%.

The first transfer of a new building, and the second and subsequent transfers of a building which has been or is transferred with a view to being substantially refurbished, as well as transfers resulting from the exercise of a call option by a lessee in a financial lease contract, are all subject to VAT.

A transfer of rural land and land which cannot be developed, second and subsequent transfers of buildings, and the first transfer of buildings that have been continuously used for a period of over two years (under a lease agreement), are exempt from VAT but subject to transfer tax at the standard rate ranging between 6% and 11%.

This does not apply if the buyer is a VAT taxpayer, entitled to a full or partial deduction of input VAT from the acquisition. In this case an option may be exercised to waive the VAT exemption and subject the transaction to VAT.

Notarial deeds that record land and building transactions subject to VAT, are subject to stamp duty. Rates vary from 0.5% to 3% depending on the location and type of transaction.

Land and building transactions which are exempt from VAT are subject to transfer tax at the standard rate ranging between 6% and 11%.

The transfer of property other than rural land is generally subject to a tax on any increase in value, calculated by the town council at the time of the sale.

The buyer pays the VAT or transfer tax. The seller pays the tax on the increase in value of urban land.

Share deals are subject to and exempt from transfer tax and VAT.

The purchase of shares in an SPV holding real estate, or owning shares in another company holding real estate, is subject to VAT or transfer tax at the standard rate ranging between 6% and 11% of the value of the property, when the transfer of the shares is made with the purpose of avoiding the payment of the tax that would have been paid in case of transfer of the real estate. The law considers there are tax avoidance reasons when at least 50% of the transferred assets consist of real estate located in Spain and are not used for business activities, provided that as a result of the purchase, the recipient of the shares acquires control or increases control over the entity.

Sweden

Sweden

Stamp duty is payable when the property is acquired directly. The tax rate for corporations is 4.25 percent of the purchase price or the tax value, whichever is higher. The tax rate is 1.5 percent for individuals. The buyer is responsible for paying stamp duty. No stamp duty is payable if the purchase is of shares in the company holding the property.

Thailand

Thailand

The following taxes and fees arise upon the transfer of real property regardless of whether the transaction involves corporations or individuals.

  1. Transfer Fee: 2 percent of the Land Department's appraisal value for the property. According to the Civil and Commercial Code, the seller and the buyer are equally responsible for paying the transfer fee unless agreed otherwise by the parties.
  2. Withholding Tax: If the seller is a corporation, there is a requirement for the buyer (payer) to withhold and pay to the authorities withholding tax at the rate of 1 percent of the actual sales price or the Land Department's appraisal value, whichever is higher.
    If the seller is an individual, the Land Department's appraisal value of the property will be used and the personal income tax rates will apply after a complex calculation.
  3. Specific Business Tax: Specific Business Tax (including municipal tax) applies at a rate of 3.3 percent of the appraisal value, or the actual transaction value, whichever is higher. Specific Business Tax applies if immovable property is sold in a commercial manner or for profit. Generally, a seller who is a corporate entity is liable to pay this tax. While an exemption may apply to a seller who is a natural person in situations where he or she has owned the immovable property for at least five years or his/her name has been entered on the house registration for the property for at least one year.
  4. Stamp Duty: If the sale is not subject to Specific Business Tax, it shall then be subject to Stamp Duty of 0.5 percent of the Land Department's appraisal value or actual transaction value, whichever is higher. Liability generally falls on the seller. In other words, the Stamp Duty is exempt if the seller is subject to the Specific Business Tax.
United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

There are currently no such taxes charged in the United Arab Emirates.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

There are currently no such taxes charged in Dubai.

UK - England and Wales UK - England and Wales

UK - England and Wales

The following indirect taxes may apply to the purchase of real estate through each type of corporate vehicle:

  • When acquiring an interest in real estate, the buyer must pay stamp duty land tax (SDLT). SDLT operates under the basis of a progressive system (with different parts of the value paid in the transaction being subject to SDLT at different rates). For a non-residential real estate acquisition SDLT is charged at 2% on the part of the price falling between £150,000 and £250,000 and 5% on any part of the price above £250,000. Higher rates can apply in relation to residential property and if residential property is purchased by a corporate entity for a price of more than £500,000 a 15% rate may apply.
  • SDLT is also payable if the transaction takes place by way of the buyer being granted a new lease. For non-residential real estate, where the lessee makes an initial capital payment for the grant of the lease, SDLT is charged at 2% on the part of the capital payment falling between £150,000 and £250,000 and 5% on any part of the capital payment above £250,000. A further 1% charge applies to the net present value of any rent payable during the term of the new lease up to the value of £5 million, with the rate increasing to 2% for the part of the net present value exceeding this threshold.
  • With effect from April 2018, the purchase of real estate (and the grant of leases) in Wales is subject to a new tax know as Land Transaction Tax (LTT).  For a non-residential real estate acquisition (or grant of a new lease) LTT is charged at 1% on any part of the price falling between £150,000 and £250,000, 5% on any part of the price falling between £250,000 and £1 million and 6% on any part of the price above £1 million.  LTT is also payable on rents due under any new lease with a 1% charge applying to the first £2 million of the net present value of rents payable during the term of the new lease and a 2% rate applying to the net present value that exceeds £2 million. Higher rates can apply in relation to residential property.
  • If the seller opts for a non-residential property to be subject to value added tax (VAT), this is payable (in most cases) at the rate of 20% on the sale price (unless the purchase is of a business as a going concern) and on any capital payment on the grant of a lease or on rent payable.
  • If VAT is payable, this is treated as part of the price paid for SDLT purposes.
  • Any VAT payable on the purchase may be recoverable from the UK tax authority although this depends on the VAT position of the buyer and what the buyer intends to do with the property.
UK - Scotland

UK - Scotland

The following indirect taxes may apply to the purchase of real estate through each type of corporate vehicle:

  • When acquiring an interest in real estate, the buyer must pay Land and Buildings Transaction Tax (LBTT) if the price paid for the asset (including any non-monetary value given) is more than £150,000 in relation to non-residential real estate or £145,000 in relation to residential real estate. LBTT operates under the basis of a progressive system (with different parts of the value paid in the transaction being subject to LBTT at different rates). For non-residential real estate LBTT is charged at 1% on any part of the consideration between £150,001 and £250,000, and at 5% on any part of the consideration above £250,000. Higher rates can apply in relation to residential property.
  • LBTT is also payable if the buyer is granted a new lease of non-residential real estate. Where an initial capital payment is payable for the grant of the lease a progressive system of charge applies. For non-residential real estate LBTT is charged at 1% on any part of the capital payment between £150,001 and £250,000 (or on any part of the capital payment between £0 and £250,000 if the annual rent is £1,000 or more), and at 5% on any part of the capital payment above £250,000. A further 1% charge applies to the extent that the net present value of the cumulative rent payable over the term of the new lease exceeds £150,000.
  • If the seller opts for a non-residential property to be subject to value added tax (VAT), this is payable (in most cases) at the rate of 20% on the sale price (unless the purchase is of a business as a going concern) and on any capital payment on the grant of a lease or on rent payable.
  • If VAT is payable, this is treated as part of the price paid for LBTT purposes.
  • Any VAT payable on the purchase may be recoverable from the UK tax authority although this depends on what the buyer intends to do with the property.
Ukraine

Ukraine

The buyer pays no taxes in the case of an indirect purchase of real estate or shares through a local company. VAT does not apply to share purchases where the consideration is cash or share-for-share.

United States

United States

No US federal taxes are imposed on the purchase of real estate. Various states and localities impose taxes on the transfer of interests in real property within that state and/or local jurisdictions, which can be payable when deeds (documents) or other instruments which convey interests in real property are officially recorded (also known as ‘documentary stamp taxes’, ‘documentary transfer taxes’, or ‘real estate transfer taxes’). In some states (including some local jurisdictions within such state), documentary transfer tax or real estate transfer tax is due on transfers of certain interests in legal entities that own real property within the respective state.

Also, various states impose taxes when mortgages or deeds of trust securing loans that are secured by interests in real estate are officially recorded.

Zimbabwe

Zimbabwe

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 rate of 20% of the capital gain for real estate acquired after 1 February 2009. Where acquisition was prior to 1 February 2009 and is disposed of after that date, CGT shall be calculated at the rate of 5% of the selling price. The purchaser pays the capital gains tax.

Share deals are subject to capital gains withholding tax payable by the shareholder at the rate of 5% for unlisted shares and in the case of listed shares the rate shall be 1% of the price at which the shares were sold.

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, an intermediated money transfer tax of 2% is payable on every electronic transaction in terms of section 22G of the Finance Act [Chapter 23:04]. Where a transaction exceeds the sum of RTGS $500 000, a flat rate of RTGS$10 000 will be payable. 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 purchaser are exempt from the tax in terms of the Thirteenth Schedule of the Income Tax Act [Chapter 23:06].