Landlords face new tax burden
…as ZIMRA rolls out presumptive rental income tax
CHENGETAI MURIMWA
Zimbabwean property owners, including those based in the diaspora, are set to shoulder a fresh tax obligation following the Zimbabwe Revenue Authority’s (ZIMRA) rollout of a new Presumptive Rental Income Tax targeting commercial property rentals.
The tax, introduced through the Finance Act, 2025, and effective from January 1, 2026, imposes a 15% levy on gross rental income derived from premises used for business, trade or professional activities.
Under the new framework, landlords, property owners, lessees and sub-lessees receiving rental income from commercial tenants will be required to register with ZIMRA and remit the tax on a monthly basis. Because the levy is charged on gross rental income, no deductions or allowances will be permitted before calculating the tax payable.
The measure significantly expands Zimbabwe’s tax base and places commercial property rentals under closer scrutiny as authorities intensify efforts to boost revenue collection.
Residential rentals are exempt from the new tax. However, in mixed-use properties comprising both residential and commercial units, the commercial portion of the rental income will be subject to the levy.
Diaspora property owners have also been brought into the net. Zimbabweans living abroad who own commercial properties in the country will be required to register and comply with the new tax requirements, while non-resident landlords must appoint local representatives to administer their tax obligations.
In a notable development, estate agents and other intermediaries handling rental payments have been designated as statutory agents and may be held accountable for ensuring the tax is remitted before rental proceeds are passed on to landlords.
ZIMRA has further empowered itself to recover unpaid taxes directly from tenants where landlords fail to comply. In such cases, tenants may be instructed to pay the tax directly to the revenue authority and will be protected from eviction or rent increases for a period of three months arising from compliance with such directives.
The presumptive rental tax will operate alongside existing taxes. Commercial rentals already subject to Value Added Tax (VAT) will continue attracting VAT at 15.5% in addition to the new 15% presumptive tax. Landlords will also remain responsible for collecting the 10% informal traders’ tax from qualifying tenants.
Property owners who fail to comply risk hefty penalties, with non-payment attracting fines equivalent to 100% of the outstanding tax, effectively doubling the amount owed.
Landlords already registered under the self-assessment income tax system before December 31, 2025, will continue declaring rental income through that framework. Those not previously registered, however, will be required to enrol under the presumptive rental income tax system and begin filing monthly returns.
