The Zambian real estate market has kicked off 2025 with yet another tax update for property owners. Just a few weeks ago, we discussed the increase in property transfer tax—and now, landlords are feeling the pinch with a hike in rental tax (also known as turnover tax).
Effective 1st January 2025, rental tax has increased from 12.5% to 16% for properties generating an annual turnover of over ZMW800,000. If you’re a landlord, here’s what you need to know about these changes and how they may affect you.
1. What’s Changed?
Rental tax rates have gone up for higher-earning landlords, making it more expensive to manage and maintain rental properties with significant income.
2. Who Does It Apply To?
The new rental tax applies to landlords of:
- Residential properties
- Commercial properties (e.g., office spaces, malls, or student housing)
- Agricultural properties leased for commercial use
3. When Do You Pay Rental Tax?
As a landlord, you must file and pay rental tax by the 14th of every month. Be sure to stay on top of this to avoid penalties.
4. What Happens if You Pay Late?
The consequences of late payment can add up quickly:
- A 5% penalty is charged for every month the payment is late.
- Interest is also applied at Bank of Zambia’s rate plus 2%.
5. What About Landlords Earning Less Than ZMW800,000 per Year?
If your annual rental income is under ZMW800,000, you’ll continue paying 4% turnover tax, as before.
What Does This Mean for You?
Together with the increase in property transfer tax, this increase in rental tax has obviously resulted in strong objections from property owners and landlords. The real estate industry, through the many different associations, is making its displeasure known to the government with the hopes of revisiting these new tax rates.
Next Steps
We recommend consulting with your accountant or tax advisor to ensure you’re compliant with the new tax rules and avoid unnecessary penalties.
At Diaspora Connect, we understand that navigating these tax changes can feel overwhelming. That’s why we’re here to keep you informed, empowered, and confident as you manage your property journey.
Stay tuned for more updates on changes in Zambia’s real estate sector.
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