Property Transfer Tax in Zambia: Obligations on Property for Sell

Who pays property transfer tax in Zambia? A common question sometimes in property transactions once the ideal real estate is found and buyer wants to move on transaction. Let’s begin by adding some definitions: Property in this case will be regarded as any land in Zambia including any buildings or additions made to or on the land at the time the transfer is effected or made. Property Transfer Tax (PTT) is tax charged on transactions in which property is sold. This tax is a percentage of the realizable value from the property transaction. Realizable value is the free market value or contract price, whichever is the greater value of the property.

Currently, the rate of Property Transfer Tax is at 5% according to the Zambia Revenue Authority (ZRA). It is always advised you check prevailing rates on a yearly basis as this may change from time to time as guided by changes from the governing ministry.

In Zambia, the law requires that the vendor (seller) pays property transfer tax. PTT is payable with 14 days from the date of assessment of the realizable value. The realizable value is assessed before property can be transferred based on declaration from the vendor in the PTT provisional return. The PTT provisional return form is available from the ZRA tax offices or ZRA web portal. The vendor is required to fill in the PTT return and provide additional documents to the ZRA.

The following are some of the current required documents in the process;

  1. The Tax Payer Identification Number (TPIN) for the seller
  2. The Contract of sale (between the seller and the buyer)
  3. State consent to assign (obtained from the Ministry of Lands or City / Municipal Council)
  4. The Identity Cards / National Registration Card (NRC) for both the seller and the buyer
  5. Certificate of Incorporation in the case of a company
  6. Order of Appointment of Administrator in the case of transfer of deceased persons estates
  7. Power of Attorney for vendor domiciled outside of Zambia if needed
  8. A valuation report for property in cases where property value exceeds ZMW500,000.00

Once these are lodged and PTT is paid in full, the ZRA then issues a tax clearance certificate and the tax payment receipt. These are then lodged by the vendor to the Commissioner of Lands. And that is the process in a simple explanation. Sounds time consuming? Well, luckily property conveyancing legal personnel can take care of all this for you. Get in tough if you would need service in this area.

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