The conveyancer prepares the draft deed, power of attorney to pass transfer as well as declarations for signing by buyer and seller
Agency: Conveyancer
Upon payment of transfer fees to the conveyance, he will draft a proposal deed of transfer (in duplicate) deriving the powers to do so from the signed and witnessed agreement of sale. In drafting the proposal transfer deed the conveyancer will always refer to the deed from the seller and other information from the Deeds Office. The proposal must also refer to the diagram deed which will be annexed to the first transfer deed.
The documentation shall include:
- Declaration by seller and by purchaser (for stamp duty purposes);
- Sale agreement;
- Power of Attorney to make the transfer;
- A search of the property title is conducted by the Lawyer at the Land Registry.
Conveyor fees are determined according to the following scale pursuant Law Society of Zimbabwe By-laws S.I. 24/2013 with effect since March 1st, 2013:
- US$ 400 on first US$ 10 000.00 and under,
- 4% on next US$ 10 000.00 – US$ 250 000.00 of value,
- 3% on next US$ 250 000.00 – US$ 500 000.00,
- 2% on next US$ 500 000.00 – 1 000 000.00,
- 1% on next US$ 1 000 000.00 and above.
Time and cost: 2 days, USD 3,580 (Conveyancer’s fees: 4% property value +15% VAT)
The seller applies for the rates clearance certificate to the local authority under whose jurisdiction the property falls
Agency: Local Authority
This application is performed by a conveyancor (fees already covered by Procedure 1). The local authority will provide an assessment of how much is payable by way of advance rates and outstanding rates, if any. In Zimbabwe there is at the moment no land tax, instead rates are paid to the local authority. So every property in Zimbabwe is subject to these rates paid by the property owner to the municipality or any other local authority for the services provided, like refuse, sewage etc. Before one can transfer a property all the rates due should be paid to the local authority, so it depends on outstanding amount due to the municipality. The rates in Zimbabwe are based on the value of the property, size and whether there are improvements or not. It is also important to note that the value of the property is a function of the location of the property. For the property we are talking about the rates would therefore be around USD 500. When the seller pays the outstanding rates payment he receives what is known as the rates clearance certificate. These rates are paid by the purchaser as pro forma costs, which will then be reimbursed by seller on the date of the transfer for the advance rates paid calculated on pro-rata basis from the date of payment to date of transfer (where purchaser does not have vacant possession or occupation prior to transfer since in this event risk and profit in the property has usually passed in terms of the agreement of sale.)
The rates account number has to be supplied in the letter to the rates department. The local authority will only need to be furnished with details of the seller and buyer and their present postal or physical addresses, and description of the property being transferred. The amount to be paid will be dependent on whether there are any rates in arrears plus no less than 3 months rates paid in advance.
Time and cost: 14 days, USD 500 (USD 500 (Approx average for high density suburb, though rates constantly increase))
The seller applies for a capital gains tax clearance certificate (either withholding tax or Capital Gains tax)
Agency: Zimbabwe Revenue Authority (ZIMRA)
The capital gains tax (CGT) is assessed by the Zimbabwe Revenue Authority (ZIMRA), which determines how much is payable by way of capital gains tax. The rate is 20% on the gains and is paid by the seller. If Seller acquired the property before February 2009 then CGT liability is 5% of gross selling price. If property acquired after February 2009, then CGT calculated at 20% of profit assessed from sale. Per methodology, CGT is not included as a cost. The Conveyancer will deliver the file in person to ZIMRA. ZIMRA customer service helps with the computation.
The documentation required:
- Form REV 1;
- Capital Gains Tax Clearance Application [C.G.T.1] Form;
- Original and copy of Title Deed;
- Original and copy of Seller and Buyer C.R.14 (The current list of Directors as registered at the Companies Office);
- CR6 form (The company’s registered address);
- Agreement of Sale signed by both the buyer and seller (which will provide the sale price, the expenses of the conveyansor);
- Original and copy of certificate of incorporation for both companies;
- Proof of payment;
- Directors’ resolution to buy/sell this warehouse by born the buyer and seller (must be signed by the 2 Directors and the Public Officer/Company Secretary);
- Original and copies of the ID’s of the people mentioned in the Resolution;
- Contact details of the representative of both companies;
- Copy of Deed of Transfer.
ZIMRA will conduct physical interviews on two directors; one from the selling, and one from the purchasing companies separately. The representatives from each company who are interviewed by ZIMRA are those who sign the Resolution of the Company and are the directors. After verification, ZIMRA will tabulate what is the actual cost of the CGT and will inform the conveyancer of the amount to be paid. A notice of payment is delivered to the Conveyancer providing details of ZIMRA bank account where the payment is to be made.
Time and cost: 12 days, no charge
Payment of Capital Gains Tax and obtain CGT certificate with ZIMRA
Agency: Zimbabwe Revenue Authority (ZIMRA)
When the assessment is issued the seller is given a Business Partner No. which enables to pay capital gains tax. The conveyancer will pay the amount representing the CGT at a commercial Bank. When payment is made one has to wait until the payment is reflected in the ZIMRA account after which a receipt is issued. The receipt will be surrendered to the ZIMRA official who did the interview for him/her to complete and issue the relevant certificate.
Time and cost: 6 days, no charge
Transfer documents are lodged for registration of title with the Registrar of the Deeds’ Office
Agency: Deeds Office
The stamp duty is paid upon lodging at the Deeds Office. The copies of the deeds are lodged with the Registrar of Deeds for examination upon payment of the registration fee and the stamp duty (according to Finance Bill 2009, for payments made in foreign currency). The deed is signed (registered) by the Registrar of Deeds or his/her designate. One copy of the deed is filed in the Office of the Registrar of Deed and the second one sent back to the conveyancer for onward transmission to his/her client (the new property owner).
The documentation shall include:
- Rates clearance certificate (obtained in Procedure 3);
- Capital gains tax clearance (obtained in Procedure 2);
- Two copies of the draft deed;
- Power of attorney to pass transfer;
- Declaration by seller and buyer;
- Original holding deed.
The Deeds Office no longer has the capacity of sending the properties for valuation. Unless ZIMRA calls for a valuation of the property sold, once CGT clearance is obtained the Deeds office does not have a basis for sending properties for valuation. Prior to ZIMRA taking over this responsibility, the Deeds office could and did send properties for valuation in case of errors or disagreements regarding the value of the property.
Time and cost: 7 days, USD 2,455
Registration fee USD 20 and Stamp duty:
- 0 to 5000 = 1%
- 5000 – 20000 = 2%
- 20,000 – 100,000 = 3%
- 100,000 and above = 4%
