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Minister Chinamasa

Oliver Kazunga Acting Business Editor
THE requirement for those who sell their immovable property through cession to pay capital gains tax has taken effect.
Announcing the national budget last month, Finance and Economic Development Minister Patrick Chinamasa said previously, a certificate confirming payment of capital gains tax issued by the Zimbabwe Revenue Authority (Zimra) was required in order to facilitate registration of the acquisition of immovable property or marketable security with the Registrar of Deeds of the transfer secretary.
He said the transfer of property in cases where taxpayers buy or sell immovable property from land developers or local authorities through cession was excluded from the requirement for a certificate                              issued by Zimra confirming payment of capital gains tax.

“Consequently, gains realised upon disposal of immovable property through cession are not subject to Capital Gains Tax upon transfer.
“I, therefore, propose to levy Capital Gains Tax on gains realised upon disposal of immovable property through cession, with effect from 1 January                                    2014.”

An economic commentator, Trust Chikohora said cession was being done by local authorities on low-value properties such as those in high-density areas where the seller does not have title deeds.

“The value for such properties is very low and by introducing capital gains tax on immovable properties sold through cession, it is one of the measures to increase revenue by government.

“On the other hand, this impacts adversely on the property seller as proceeds from such a transaction                        is reduced because a certain percentage of profits           from the sell will be levied as capital gain tax,”                                   he said.

The Reserve Bank recently issued a statement that it had indefinitely suspended the implementation of a policy that required funds gathered by disposing of immovable property of $50 000 or more be paid in tranches.