Property Transfer Tax in Zambia: Special Cases
So now that you understand your tax obligations on property for sell, you need to also have an idea of the special cases that may apply with regards to property transfer tax (PTT) in Zambia. In a few special cases, you may be exempt from paying property transfers tax in Zambia. The following are some special cases that provide for exemptions at the time of this article*;
- The Case of Governments
Both the Zambian government and foreign governments are provided exemptions under the Property Transfer Tax Act of 1984. Specifics of these provisions may be clarified from your nearest tax office or tax consultant.
- The Case of International Organisations
Under selected circumstances, the Minister of Finance may provide for exemption of certain international organisations, foundations or agencies of interest.
- The Case of Charitable Organisations or Trusts
For charitable organisations or trusts that are registered under the Income Tax Act Cap 323, exemptions from PTT may be applicable. Always check with the ZRA for any exemptions to ensure you benefit from any possible exemptions.
- The Case of Co-operative Societies
Any co-operative society registered under the Co-operative Societies Act is provided with exemptions from PTT.
- Local Authorities in Zambia
Local Authorities are also provided with exemption from PTT.
- Registered Trade Unions in Zambia
For Trade Unions registered under the Societies’ Act, exemption from PTT may also be applicable for tax purposes.
- The Case of Registered Clubs or Associations
Exemption from PTT is provided for any clubs, societies or other associations that are registered under the provisions of section 41 of the Income Tax Act. Consult your nearest tax office if you are a registered club or association for guidance.
- Pension Funds
Under the Act, approved pension funds are provided exemption from PTT.
- Medical Aid Societies
Approved medical aid societies are also exempt from PTT.
- Employees’ Saving Schemes or Funds
Any approved employees’ savings schemes or funds are exempted from payment of PTT.
- The Case of Political Parties
Any political party registered as a statutory society under the societies act is exempted from PTT obligations.
- The Case of Company Equity & Property
Under the special case where property is transferred by a shareholder of a company incorporated under the Companies Act, to the registered company as the shareholder’s contribution towards the equity of that company, exemption from PTT is provided for in this case.
- The Case of Family Gifts
In the case of property transferred as a gift to a member of the immediate family as defined under the PTT Act Cap 340, PTT is required and will be calculated based on the realizable value if any. This is uniquely a special case as two conditions must hold in order to be exempt from PTT. Firstly, the family member must meet the definition as guided for under the PTT act as an immediate family member. Secondly, the actual realized value received by the transferring party must be zero, therefore implying no PTT will be paid in this case.
For up-to-date guidance on the above special cases with regards to PTT, please always consult your tax advisor or the nearest tax office. Got additions or comments on this? Leave your comment in the section below.
*DISCLAIMER: BCA Properties does not offer tax advisory services; therefore, no part of this article is might to replace your tax advisor recommendations. For up-to-date tax information in Zambia, contact the Zambia Revenue Authority (ZRA).