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If you’re planning to invest in Zimbabwean real estate or shares, one of the first questions is: will you pay tax on profits when you sell?
In Zimbabwe, capital gains tax (CGT) does apply, unlike Dubai where individuals pay zero CGT. Understanding how it works helps investors plan financially and minimize tax liability.
Overview of Capital Gains Tax in Zimbabwe
Capital gains tax is a levy on the profit made from selling an asset, such as:
- Residential or commercial property
- Shares in a company
- Other capital assets
Example: If you buy a property in Harare for USD 50,000 and sell it for USD 60,000, the USD 10,000 profit is subject to capital gains tax.
Current Rates (2025/26)
- Individuals: 20% on net gains from property sales
- Companies: Gains are included in corporate tax (24% on profits)
- Exemptions: Some relief may apply for primary residences under certain conditions
How Capital Gains Tax Works
To calculate CGT:
- Determine the sale price of the asset.
- Subtract the original purchase price and allowable expenses (e.g., improvements, agent fees).
- Apply the capital gains tax rate.
Example:
- Purchase price: USD 50,000
- Sale price: USD 60,000
- Allowable improvements: USD 2,000
- Net gain = 60,000 – 50,000 – 2,000 = USD 8,000
- CGT (20%) = USD 1,600
Key Fees & Related Considerations
Even after CGT, some other costs may apply:
- Deeds Office transfer fees: ~2% of the property value
- Agent fees: 3–5% depending on the property
- Municipal rates: Must be up to date before sale
Tip: Deducting these expenses reduces the taxable gain, lowering your CGT liability.
Comparison: Zimbabwe vs Other Countries
|
Jurisdiction |
Individual CGT Rate |
Corporate Tax |
Notes |
|
Zimbabwe |
20% |
24% on corporate profits |
Applies to property sales and certain shares |
|
UAE (Dubai) |
0% |
0–9% corporate tax |
Individuals do not pay CGT; corporate tax applies only to business profits |
|
South Africa |
7–18% |
28% |
CGT included in taxable income |
|
UK |
10–20% |
25% |
Rates vary based on income and asset type |
Zimbabwe’s CGT is moderate, higher than Dubai (0%), but lower than some developed markets like the UK.
Tax Residency & Expat Considerations
- Residents: Pay CGT on local property and share sales.
- Non-residents: CGT applies on sales of immovable property in Zimbabwe.
- Foreign investors: Must comply with Zimbabwe Revenue Authority (ZIMRA) regulations. CGT is deducted at sale or declared during tax filing.
Why Zimbabwe Remains Attractive for Investors
Even with CGT, Zimbabwe offers strong investment potential:
- Rising demand for residential and commercial property in Harare, Bulawayo, and Victoria Falls
- Options range from city apartments to private estates
- Legal framework allows title deed verification and secure ownership
With proper planning, investors can still achieve strong returns despite paying CGT.
Key Takeaways
- CGT applies in Zimbabwe: 20% for individuals, 24% for companies.
- Profits from property and certain share sales are taxable; allowable costs reduce your gain.
- Other transaction costs include agent fees, transfer fees, and municipal rates.
- Non-residents are liable for CGT on Zimbabwean property.
Strategic planning and awareness of exemptions can minimize CGT liability.
