If you are selling a property in Zimbabwe, you need to consider the following costs which will be for your account
- All Registered Estate Agents are governed by the Estate Agents Council. The fees we can charge are set down by law. A commission charged on the sale of immovable property is 5% of the purchase price of the property. There is value added tax charged on this 5%. The total fee charged by the Estate agent is 5,75%. Estate agents may charge more than this. But 5% plus VAT is the minimum statutory fee allowed to be charged by registered Estate agents.
The commission is paid by the Seller and not by the Purchaser. It is in direct contravention of the Estate Agents Act to receive payment from both the buyer and the seller for the same property transaction. This double charging (albeit at different rates) is becoming more and more common, with some agents charging up to $350 for an “agreement fee” payable by the Purchaser (which is non-refundable!), and then charging the Seller 5% of the Purchase Price as commission.
Please be aware of these unscrupulous agents who prey on the ill-informed public. You do not have to pay an agreement fee, nor should you pay any form of commission if you are a buyer. The commission paid to the agent is payable by the owner of the property, that is the Seller.
- Property tax is the 5% tax charged on any property purchased prior to the February 2009 dollarisation. Prior to this date, the title deeds will reflect and Zimbabwean Dollar Purchase Price and it is impossible to calculate the gain in value from then until now. Therefore, 5% of the sale price is deemed to be a fair estimate on the gain in value of the property.
- Capital Gains Tax is the tax charged (20%) on the difference between the price you paid for your property (post-February 2009) and the price you are selling it on for now. There are several deductions which can be made, including improvements, fees and a yearly appreciation allowance. Your conveyancer who is dealing with the transfer of the property will be better placed to advise you of your exact capital gain tax cost. Any claims for deductions on your capital gains tax need to be accompanied by a tax invoice addressed to the registered owner of the property.
For further advice on property transactions, contact Nicky Page at nicky@pageproperties.co.zw or visit our website www.pageproperties.co.zw