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When engaging in property transactions in Zambia, one common question arises: Who pays the property transfer tax? In this article, we will provide clear definitions and explanations to help you understand this aspect of real estate transactions.
Defining Property and Property Transfer Tax: In Zambia, property refers to any land, including buildings and additions made to or on the land at the time of transfer. Property Transfer Tax (PTT) is a tax imposed on the sale of property. The tax amount is a percentage of the realizable value, which is determined as the greater value between the free market value and the contract price.
Current Property Transfer Tax Rate: As per the Zambia Revenue Authority (ZRA), the current Property Transfer Tax rate stands at 5%. However, it is advisable to check the prevailing rates annually, as they may be subject to changes guided by the governing ministry.
Responsibility for Paying Property Transfer Tax: According to Zambian law, it is the vendor (seller) who is responsible for paying the Property Transfer Tax. The tax must be paid within 14 days from the date of assessment of the realizable value. The vendor provides a declaration in the PTT provisional return, which is used to assess the realizable value before the property transfer can take place. You can obtain the PTT provisional return form from ZRA tax offices or their web portal. The vendor is required to complete the return and submit additional documents to the ZRA.
Required Documents for Property Transfer Tax: During the process, certain documents are necessary, including:
Issuance of Tax Clearance Certificate: Once all the required documents are submitted and the Property Transfer Tax is paid in full, the ZRA issues a tax clearance certificate and a tax payment receipt. These documents are then submitted by the vendor to the Commissioner of Lands. This simple explanation of the process can be time-consuming, but fortunately, property conveyancing legal professionals can handle it for you. If you require assistance in this area, please feel free to get in touch.
Have Further Questions? If you have any additional questions or require further information, please leave them in the comment section below or contact us directly for inquiries and feedback.
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1.1 what legislation governs real estate in your jurisdiction.
The primary statutes governing real estate in Zambia are:
Other statutes that relate to real estate include:
No special regimes apply to different types of real estate. However, separate laws apply to:
In particular:
2.1 what types of ownership rights exist in your jurisdiction.
The types of ownership rights that exist in Zambia are based on the land tenure system under which they fall. The Zambian land tenure system consists of two systems:
Recognition of customary tenure does not bring about the registration of ownership rights, but only the protection of use and occupancy rights. Customary land is controlled by traditional chiefs and their headmen, who act with the consent of their people. One key aspect of traditional tenure is free access to land by all members of a community. In customary areas in Zambia, individual ownership, concurrent interests and communal interests are recognised.
In relation to ownership rights under statutory tenure, once registered by the relevant registration body, ownership rights refer to:
There is no freehold tenure in Zambia. Section 5 of the Land (Conversion of Titles) Act 1975 (repealed by the Lands Act) abolished freehold tenures and replaced them with statutory leasehold for a maximum period of 100 years, renewable, commencing on 1 July 1975.
Section 10 of the Lands Act provides that a lease, upon expiry, will be renewed for a period not exceeding 99 years. However, 100-year leases granted pursuant to the Land (Conversion of Titles) Act 1975 are not rendered invalid by virtue of Section 30 of the Lands Act.
Approximately 93% of the land in Zambia is customary land. Thus, the customary structure of ownership detailed in question 2.1 applies to the majority of the country's population.
As customary structure is focused on communal rights, persons that wish to acquire individual ownership acquire land under statutory tenure. Further, according to Section 8 of the Lands Act, anyone that holds land under customary tenure may convert it into leasehold tenure for a period not exceeding 99 years.
Section 3(1) of the Lands Act provides as follows: "Notwithstanding anything to the contrary contained in any other law, instrument or document, but subject to this Act, all land in Zambia shall vest absolutely in the President and shall be held by him in perpetuity for and on behalf of the people of Zambia."
Accordingly, one notable restriction on real estate ownership is that there is, in fact, no such thing as ‘ownership' of land in an absolute sense. In Zambia, all land is vested in the president, who holds it in perpetuity for and on behalf of the people of Zambia. What a person can therefore ‘own' in Zambia is merely an estate or interest in land of a defined duration. However, it is usual in everyday parlance to describe someone that has substantial rights in land as the ‘owner' of the land.
Further, according to Section 3(3) of the Lands Act, land cannot be owned by non-Zambians, except in the following instances:
There is no statute which states that the land and the fixtures set thereupon are inseparable. However, the Zambian courts have stated that whatever is attached or annexed to land has become part of the land. Namung'andu v Lusaka City Council (1978) ZR 358 (HC) 10 is instructive on this point. The court held as follows: "First, the commonest fixture is a house. A house is built into the land, so the house, in law is regarded as part of the land; the house and the land are one thing. Anything which is an integral part of the house, such as for instance, lead pipes, will also be a fixture and will be attached to or form part of the land."
Accordingly, the ownership of land and of buildings constructed thereon is generally not legally separable.
However, only the decisions of the two equally ranked apex courts – that is, the Supreme Court and the Constitutional Court – are binding on all other courts. This was confirmed in the Supreme Court decision of Ossie Mangani Zulu v Robbie Phiiri SCZ/8/138/201. The court held that, in keeping with the fundamental common law principles of stare decisis and judicial precedents in Zambia's legal environment, which have both binding and persuasive case authorities, only Supreme Court decisions and decisions of equally ranked courts (in this case, the Constitutional Court) are binding.
Therefore, although the Namung'andu decision reflects the position of the law, it is not binding, but simply persuasive as it was decided by a high court.
If one owns the land, the security interest that can attach to the land is a mortgage, which can be legal or equitable. If the land is not owned (eg, it is leased), the security interest that is normally attached is an assignment of rights which is registered with both the Patents and Companies Registration Agency and the Lands and Deeds Registry under the Ministry of Lands. These security interests are prioritised by date of registration.
3.1 what body administers the land register in your jurisdiction.
The Lands and Deeds Registry under the Ministry of Lands.
Yes. Section 4 of the Lands and Deeds Registry Act makes mandatory the registration of real estate rights, transactions and encumbrances. It provides that: "Every document purporting to grant, convey or transfer land or any interest in land, or to be a lease or agreement for lease or permit of occupation of land for a longer term than one year, or to create any charge upon land, whether by way of mortgage or otherwise, or which evidences the satisfaction of any mortgage or charge, and all bills of sale of personal property whereof the grantor remains in apparent possession… must be registered within the times hereinafter specified in the Registry or in a District Registry if eligible for registration in such District Registry."
According to Section 6 of the Lands and Deeds Registry Act, failure to register will result in the document requiring registration being null and void.
In Sundi v Ravalia [LRNR] (1949-54) Vol p 345, the High Court of Northern Rhodesia stated that "null and void" under Section 6 means "of no effect whatsoever"; and that in such a situation, a lease cannot pass any interest and cannot be specifically enforced.
The decision in Sundi v Ravalia was followed by the Supreme Court of Zambia in Krige v Christian Council of Zambia 5 [1975] ZR 152, in which it held, among other things, that the engrossment of a lease for execution and the accompanying letter constituted a valid memorandum in writing of an agreement for a lease which should have been registered under the Lands and Deeds Registry Ordinance. The effect of non-registration was that the agreement was void for all purposes whatsoever.
No answer submitted for this question.
The process of registration at the Lands and Deeds Registry and the applicable requirements may vary, depending on the document being registered. For instance, the process for registration of a lease is as follows:
Registered information is publicly accessible. The register may be searched and examined by anyone, and certified copies may be obtained if required, upon payment of a prescribed fee as provided for in Sections 22 and 23 of the Lands and Deeds Registry Act.
All leases are available in digital text documents; and maps of parts of the Zambian capital, Lusaka, are also available in digital format and are linked to the digital text documents. The information is contained in three types of registers, as provided for in Section 9 of the Lands and Deeds Registry Act:
4.1 what types of commercial leases exist in your jurisdiction.
The law does not provide for various types of leases. However, leases are normally distinguished as ‘office' or ‘retail'.
The terms of a commercial lease are generally freely negotiable. However, the courts have issued decisions on the elements that a valid lease should contain. In Bobat v Kapindula (1974) ZR 235 (SC), the Supreme Court held as follows: "It is settled beyond question that, in order for there to be a valid agreement for lease, the essentials are that there shall be determined not only the parties, the property, the length of the term and the rent, but also the date of its commencement."
As such, commercial leases typically cover:
Further, commercial leases are governed by the Landlord and Tenant (Business Premises) Act. This act defines a ‘lease' to include:
The Landlord and Tenant (Business Premises) Act relates exclusively to commercial leases. Its primary objective is to offer security of tenure for tenants occupying property for business purposes, as provided in the preamble. ‘Business' is defined in Section 2 as "a trade, an industry, a profession or an employment, and includes any activity carried on by a body of persons, whether corporate or incorporate, but does not include farming on land". Therefore, commercial leases, in accordance with the act, are those that are used for the purposes of conducting a trade, an industry, a profession or employment, excluding farming on land.
‘Tenancy' is defined in Section 2 as: "a tenancy of business premises (whether written or verbal) for a term of years certain not exceeding twenty-one years, created by a lease or under-lease, by an agreement for or assignment of a lease or under-lease, by a tenancy agreement or by operation of law, and includes a sub-tenancy but does not include any relationship between a mortgagor and mortgagee as such, and references to the granting of a tenancy and to demised property shall be construed accordingly."
The Landlord and Tenant (Business Premises) Act protects tenants against unfair termination of leases by landlords. In this regard, any landlord that seeks to terminate a commercial lease must follow a standard procedure under the act. Further, the landlord must provide at least six months' notice to terminate the lease. In addition, the lease can be terminated only on specific grounds set out in the act. A tenant also has the right to oppose the termination of a lease in court in terms of the act. This makes termination of leases falling under the act by landlords very difficult.
In accordance with Section 4 of the Lands and Deeds Registry Act, leases for a term longer than one year must be registered.
The documentary requirements are as follows:
A commercial lease must be signed by the parties and duly registered.
The lease is registered at the Lands and Deeds Registry. The lease must be accompanied by the certificate of title of the land, as well as a lodgement schedule, which shows which documents have been submitted to the Ministry of Lands. A registration fee of 1% of the annual rent is then payable, with a cap of ZMW 15,000. Finally, when the lease is registered, it will be noted in the memorials of the certificate of title.
Statute does not set out such obligations and liabilities. Instead, these are subject to contract. As a matter of practice, some of the tenant's obligations and liabilities include the following:
The primary duty of the landlord is to give the tenant occupation and control of the property. This was espoused by the Supreme Court in Kaonga v Attorney General (Appeal 79/2009) [2012], in which the court affirmed the definition of a ‘tenant' as one who "holds or possesses land or tenements by any kind of right or title".
The landlord must also:
Breach of a commercial lease entitles the innocent party to a number of remedies. The landlord's remedies for breach include:
The tenant's remedies for breach of covenant are:
No statutory provisions govern how rent variations are to be effected during the term of the lease. All rental variations and escalations are usually governed by the lease agreement entered into by the parties. As a matter of practice, rental escalations are undertaken during the renewal of the lease agreement.
The escalation may be a percentage of the rent or may be determined by the reference to the Zambian Consumer Price index.
In accordance with the Income Tax Act (Chapter 323 of the Laws of Zambia), rental income is subject to withholding tax at the specified rate of 10%.
Additionally, in terms of the Value Added Tax Act (Chapter 331 of the Laws of Zambia), read together with the Value Added Tax (Exemption) Order, commercial property is not exempt from value added tax (VAT) and rental income arising from the letting of property is not subject to VAT. However, income derived from the letting of commercial property is subject to VAT at the rate of 16%
Yes. Triple net leases may be agreed by the parties, as the law does not regulate the rental arrangements between the parties.
The means through which disputes are resolved will vary depending on the circumstances of the case. For instance, some disputes are resolved informally, by agreement of the parties. Alternative dispute resolution methods such as mediation may also be resorted to, while some disputes are resolved through litigation.
Legally, there is no requirement to include guarantees in lease agreements. However, in practice, some landlords will insist that a third-party guarantee, whether corporate or personal, be given for a lease. This is commonly the case where the tenant is a company with limited trading history and financial records, or which is unable to demonstrate to the landlord that it will be a reliable and financially stable tenant. Company directors or corporations are often called upon to stand as guarantor for compliance with the lease obligations.
By signing such a guarantee, a company director will be putting his or her personal assets at risk if the tenant company cannot comply with the lease obligations.
As an alternative to a personal guarantee, a tenant could offer a security deposit.
In Zambia, it is common for most landlords to request security deposits as opposed to guarantees. However, there are instances where landlords request both guarantees and security deposits.
5.1 what form do real estate transactions typically take in your jurisdiction.
Real estate transactions typically take one of two forms:
The sale of land in Zambia is usually governed by the Law Association of Zambia General Conditions of Sale 2018 (LAZ GCS). These conditions are not statutory, but merely guidelines governing the sale of land, thus promoting uniformity and certainty in real estate transactions.
The players typically involved in a real estate transaction are:
A real estate agent may also be involved, depending on the transaction.
There is no statutory obligation for a seller to disclose during a sale transaction. However, most contracts of sale do contain this duty.
Condition 2 of the LAZ GCS provides that a vendor must deduce title when forwarding the draft contract to the purchaser's advocate. ‘Deducing title' is defined under Condition 1 to mean "documents and deeds and agreements which would normally be forwarded to the Purchaser's Advocates to show the Vendor's title".
Accordingly, the LAZ GCS oblige the seller to disclose that it has title to the property. In this regard, the seller makes the representation that it does indeed have title by producing the necessary documents that prove this.
Most contracts in Zambia are prepared on the basis of the LAZ GCS.
The most common form of due diligence is an unofficial search at the Ministry of Lands in the Registry of Lands and Deeds. The search provides basic information about the property, such as when it was registered and any sub-divisions, transfers or mortgages.
However, it is more prudent to conduct an official search to obtain search certificates in accordance with Section 23 of the Lands and Deeds Registry Act. This is because, in accordance with the act, for a search to be valid, it must comply with Section 23.
In addition to searches at the Ministry of Lands, the buyer will usually ask for a copy of the title deed in respect of the land being transferred and the identity documents in respect of the seller.
Effecting a sale of land from seller to buyer involves the following steps:
The first step in the process is the signing of the contract of sale.
Once the contract of sale is signed, most contracts will provide for the payment of a deposit of the purchase price.
The seller (or the seller's lawyers) must then obtain state consent to assign, which ordinarily takes a week or so.
Having obtained state consent to assign, the seller or its lawyers then apply to the ZRA for an assessment of property transfer tax (PTT), based on the purchase price or market value of the property, whichever is higher in the view of the commissioner general. This process takes about two weeks. The ZRA will then issue an assessment notice.
Having received the notice, the seller then pays the PTT – usually out of the deposit paid by the purchaser. When this is done, the ZRA issues a tax clearance receipt and tax clearance certificate. The parties will then sign a deed of assignment. This is the document that actually transfers the property.
Once the deed of assignment has been signed and sealed by both parties, the seller's lawyers issue a notice to complete. This is essentially an invoice showing the balance to be paid by the purchaser. On receipt of the notice, the purchaser pays the balance.
The seller then hands over to the purchaser the following documents:
Once the purchaser is in custody of the above documents, the documents are lodged at Ministry of Lands. At the Ministry of Lands, the following fees must be paid:
Once the purchaser has paid the balance, it can take possession of the property. Change in title may take place between two weeks and a month thereafter. However, the process can be expedited by paying an extra fee.
The entire process may take about three to five months to complete.
There are no statutory obligations in respect of the sale of real estate. However, in accordance with the LAZ GCS, the following are the standard obligations and liabilities of the buyer and seller.
Seller: The first obligation of the seller, as provided in Condition 2, is to deduce title to the buyer. This involves producing all necessary documentation proving that it has title to the property. In terms of Condition 13, the seller is also obliged to give the purchaser vacant possession upon completion of the transaction. However, this is subject to the terms of the contract.
If the property is a subdivision of land, Condition 14 provides that the vendor shall be liable for:
Buyer: Under Condition 3 of the LAZ GCS, unless the contract provides otherwise, the purchaser must pay 10% of the purchase price on the exchange of contracts. On completion of the purchase, or if possession is given to the buyer prior to completion, the purchaser becomes liable for the outgoings on the property, in accordance with Condition 4 of the LAZ GCS
According to Condition 7, the buyer must make payment within five working days of the seller sending the buyer a completion statement and notifying the buyer of receipt of the tax clearance certificate from the ZRA. Condition 5 provides that if the buyer defaults, the purchase price begins to accrue interest at the rate of 15% per annum or 5% per annum if the contract is denominated in foreign currency.
The purchaser is also responsible for preparing the assignment and must deliver it to the seller at least 10 days before the date fixed for completion as espoused by Condition 16.
Consequences of breach: Condition 22 of the LAZ GCS states that if either party fails to perform its part of the contract, the other party may give the defaulting party at least 14 days' notice in writing specifying the default complained of and requiring the defaulting party to remedy the breach before the expiration of such notice.
If the defaulting party is the seller and the seller does not comply with the terms of such notice, the buyer can either apply to the court for relief or rescind the contract.
If the buyer, being the defaulting party, does not comply with the terms of the notice, the deposit (if any) will be forfeited to the seller. The seller may also resell the property or resume possession (if the buyer took possession) and recover the documents belonging to it that it may have given to the buyer.
In terms of the PPT Act (Chapter 340 of the Laws of Zambia), PPT is payable on a real estate transaction. It is first necessary to submit a valuation report to the ZRA obtained from a land valuer or land surveyor for the purpose of establishing the taxable value of property. However, in accordance with Section 4(3) of the Property Transfer Tax Act, the ZRA may use the assessments of the Government Valuation Department instead.
PTT is charged on and collected from the person transferring the property on the realised value (ie, the open market value in accordance with Section 5 of the Property Transfer Tax Act) or the contract price, whichever is higher.
6.1 who are the most common providers of real estate finance in your jurisdiction do any restrictions apply in this regard.
Commercial banks are the most common providers of real estate finance in Zambia. Other financial institutions – such as the Zambia National Building Society, the Pan African Building Society and the Finance Building Society – are also major lenders.
In terms of restrictions, Section 84 of the Banking and Financial Services Act (7/2017) restricts banks' investment in real estate. This section provides that a bank or financial institution may not, directly or indirectly, without the prior written approval of the Bank of Zambia (the central bank of Zambia), acquire ownership of an interest in commercial property, except as an interest that is necessary to secure or satisfy a debt or other liability payable to the bank or the financial institution, in which case it must be disposed of within two years.
The types of real estate finance available in Zambia are mortgage loans and term loans. A mortgage loan is a long-term loan through which the lender takes security over the property. On the other hand, a term loan is more short term and, as opposed to a mortgage, may involve the assignment of contractual rights.
Real estate finance may also be secured or unsecured. Secured real estate finance involves the lender taking security over the property. The security package may include:
An unsecured loan involves no security over the loan. However, this type of real estate finance is rare.
Finally, real estate finance may be for construction, expansion and improvement or outright acquisition.
Financing agreements normally have documents and requirements as conditions precedent to the agreement. These include:
Security interests required by lenders will normally be in the form of:
Generally, the process for obtaining real estate finance is that the party seeking to embark on the real estate project will approach a financial institution and present the real estate project to the financial institution. This presentation could include information such as:
The financial institution will then assess the bankability of the potential real estate project, based on the information presented to it. If the financial institution decides to finance the real estate project, a term sheet will be completed by the borrower. The financial institution's lawyers will then request further documentation such as security documents. Once the final documentation has been signed by both parties, the borrower can begin to draw down on the loan.
The costs payable are normally legal fees incurred by both parties for the work of their lawyers. The borrower must also pay interest on the sum obtained from the lender.
In the event of breach, the law provides various remedies to the lender to enforce the security. These include:
7.1 who are the most common investors in real estate in your jurisdiction do any restrictions apply in this regard.
Although it is fairly common for local people and entities to invest in real estate in Zambia, the bulk of real estate investment is from international investors.
According to the Zambia Business Times , international players invested $716 million in Zambia between 2014 and 2017 alone, of which 74.6% was in the capital of Lusaka.
While South Africa accounts for 51% of the international funds invested in real estate, there have also been investments from 10 other countries, showing some diversity in the investor base. The international investors transacting in Zambia include quality names such as:
Direct investment: The first – and sometimes most obvious – choice is for an individual or group of individuals to purchase a property directly from another individual, or to engage in a commercial lease agreement. The benefit of this method is that it provides the purchaser or tenant with direct control over the property selection, due diligence at the Ministry of Lands, financing, leasing and management processes. However, one drawback is that it comes with the time-consuming responsibility of managing the asset on a day-to-day basis and exposure to the financial liability that could result from a deal that turns out not to be as lucrative as expected.
Another more important drawback is that commercial properties – especially the best ones – are expensive and likely out of reach for all but the wealthiest individual investors with the greatest liquidity. For example, a commercial office building in a prime location could cost tens of millions of dollars, putting it out of the reach of most individuals. As an alternative, they could purchase a smaller asset such as a house and turn it into office space, but this would not provide the same scale as a larger office building.
Indirect investment: Broadly, through an indirect investment, a party places funds with a professional asset manager and outsources the task of selecting, financing and managing the property to it. The obvious benefit of an indirect investment is that the investor gets all of the benefits of ownership without the hassle of managing the property. For example, a private equity real estate firm has a mandate to pool investor money and deploy it in real estate assets. Private equity deals can be structured as real estate funds, whereby an investor pledges money to a fund and allows the manager to choose how to invest it.
Direct investments are established through the acquisition and registration of the property in question, as explained in question 7.2. Indirect investments are normally handled by professional asset managers, which are ordinarily companies and incorporated under the Companies Act (10/2017), and many of them fall within the pension scheme regulatory framework.
8.1 how is land use regulated in your jurisdiction.
Land use in terms of planning and zoning is regulated by the Urban and Regional Planning Act (3/2015). This act provides for rational and integrated methods for land use and development, as opposed to allowing land owners to freely use and develop land in any way they wish. The primary object of the regulation of land use is to ensure that all land is put to the use which is best from the point of view of the community.
Among other things, the Urban and Regional Planning Act sets out the development, planning and administration principles, standards and requirements for urban and regional planning processes and systems. This act repealed the Town and Country Planning Act (Chapter 283 of the Laws of Zambia).
Part VI of the Urban and Regional Planning Act provides for planning applications and permission. Section 49 of the act provides that "a person shall not carry out any development on land, change use of land or subdivide any land without planning permission".
Section 2 of the Urban and Regional Planning Act defines ‘development' to include building or rebuilding as well as subdivision of land. Thus, for any construction or subdivision of land, planning permission must be obtained.
Section 52 of the Urban and Regional Planning Act provides that planning permission for development will be granted by way of development permits. It further provides that an application for planning permission must be made to the planning authority (regional, provincial or local, as defined in Section 2).
If an application for a development permit involves a major development, the planning authority will not consider the application unless the applicant has given 14 days' notice of intent to make an application.
Anyone that intends to oppose an application for the grant of a development permit can do so in writing, specifying the reasons for the objection.
Section 55 of the Urban and Regional Planning Act affords the planning authority 90 days from receipt of application for a major development or change of land use, or 28 days for any other development, to grant, defer or reject the application for a development permit.
Subdivision: To obtain planning permission for subdivision, the applicant must first obtain sketch plans for the property to be subdivided. These are obtained by engaging a surveyor to survey the land and prepare sketch plans in respect of the land.
Once the sketch plans have been prepared, an application for approval of the subdivision must be delivered to the relevant council (planning authority). The following documents must be submitted to the council for the purpose of subdividing land:
The planning authority has 28 days from receipt of the application to grant, defer or reject the application.
On or before the lapse of 28 days, the planning authority will decide whether to grant planning.
Construction: The first step to obtain planning permission for the construction of property is to log on to the website of the city council in the city in which the planning permission is sought. The drawings of the building to be constructed and the certificate of title to land must also be uploaded on the ‘Metro Manager' section of the website.
The website will then automatically generate an invoice for the costs. These cannot be ascertained in advance because the automatically generated invoice takes into account various factors such as the area in which the building will be constructed.
The amount specified in the invoice must then be deposited into the bank account of the city council.
Once a receipt of payment of the amount specified in the invoice is presented to the city council, the drawings that were initially uploaded will be scrutinised by the planning committee, comprised of councillors, to decide whether to grant planning permission.
The length of this process will depend on the schedule for sittings of the committee (these are held every two months on average) and the number of applications that are considered per sitting.
Yes. In accordance with Section 59 of the Urban and Regional Planning Act, anyone that is aggrieved with the decision of a planning authority can appeal in writing to the appropriate planning appeals tribunal within 30 days of receipt of the decision of the planning authority.
Under Section 49 of the Urban and Regional Planning Act, the development of land without planning permission or failure to comply with planning permission constitutes an offence. Further, a planning authority can demolish the structure without payment of compensation
Yes. Section 3 of the Lands Acquisition Act (Chapter 189 of the Laws of Zambia) empowers the president to compulsorily acquire property if it is in the interests of the state to do so.
If the president believes that expropriation is in the interests of the state, preliminary investigations such as surveys may be conducted on the land. A notice of intention to acquire the property is then given to the owner of the land. A subsequent notice is then issued by the minister to yield up possession after the expiry of a specified period. Upon the expiry of this period, the land owner is paid compensation and the land is then re-entered in the Registry at the Ministry of Lands by the commissioner of lands.
No. The compulsory acquisition of land is subject to payment of compensation according to Section 10 of the Lands Acquisition Act. However, Section 15 of the act provides that no compensation will be payable for land which is undeveloped and unutilised.
9.1 what main environmental legal provisions apply to the development, use and occupation of real estate.
The Environmental Management Act (12/2011) (EMA) governs environmental approval in relation to the development, use and occupation of real estate. In accordance with Section 29 of the EMA, a project that may have an effect on the environment may not be commenced without the written approval of the Zambia Environmental Management Agency (ZEMA) and must accord with any conditions imposed in that approval.
Further, the appropriate authority or other public body will not grant a permit or licence for the execution of any project that is likely to have an effect on the environment unless:
The procedure for obtaining ZEMA's approval is governed by the Environmental Protection and Pollution Control (Environmental Impact Assessment) Regulations (SI 38/1997) (‘EIA Regulations'). According to Regulation 3 of the EIA Regulations, a developer may not implement a project for which a project brief or an environmental impact statement is required unless:
As defined in Regulation 2 of the EIA Regulations, a ‘decision' letter is a letter issued by ZEMA stating that:
In making a decision regarding an EIA, ZEMA will take into account:
ZEMA must make a decision within 30 days of receipt of a report from a public hearing or 20 days from the date on which an EIA is submitted, as provided under Regulation 20(2). Once ZEMA has made its decision, it will issue a decision letter stating either that:
The developer or occupant of real estate may be held liable for environmental contamination.
In accordance with Section 106 of the EMA, where it has reasonable grounds to believe that any condition of a licence issued under the EMA has been breached, ZEMA may serve a compliance order on the licensee requiring it to remedy the breach within the period stipulated in the order. The compliance order may suspend the licence with immediate effect if such an action is considered necessary to prevent or mitigate an imminent risk of significant adverse effects to the environment or to human health occurring.
Alternatively, the compliance order may require the licensee to take specified measures to prevent or abate any adverse effect.
If the licensee fails to comply with a compliance order, ZEMA may:
In addition, failure to comply with the compliance order is an offence and the offender is liable, upon conviction, to a fine not exceeding 300,000 penalty units, imprisonment for a period not exceeding three years or both. If the party fails to comply with a requirement specified in the compliance order within the specified timeframe, it will be subject to a further fine not exceeding ZMW 1 million for each day that the offence continues.
In terms of clean-ups, Section 32 of the EMA provides that anyone that contravenes the act by discharging harmful substances into the environment can be ordered to:
The offender may also be required to pay the full cost of any damage that the pollution has caused to third parties.
Section 29 of the EMA is paramount in this regard. It provides that no project that may have an effect on the environment may be commenced without the written approval of ZEMA. Thus, parties that wish to engage in real estate transactions such as construction must always obtain ZEMA's approval.
Further, in line with Section 106, contravention of the EMA could lead to revocation of the approval initially provided by ZEMA through the issuance of a compliance order.
The issues detailed in question 9.1 must also be taken into consideration for real estate transactions.
Sustainability is high on the Zambian government's agenda and the country is thus a party to treaties and agreements to reduce greenhouse gas emissions, such as the Kyoto Protocol and the Paris Agreement.
The environment is key in fostering sustainable development, as Zambia's key economic sectors depend on the existence and availability of natural resources. Therefore, emphasis has been placed on policies that support the sustainable conservation of natural resources. However, sustainability policies and regulations are fragmented, as there is no specific legislation that states the types of structures and materials that should be used to construct sustainable green buildings.
In terms of energy efficiency, at the national level, the Ministry of Energy and Water Development oversees policy formulation and facilitates the implementation of energy programmes, including energy efficiency. Currently, there is no law on energy efficiency in Zambia. The main initiative aimed at increasing energy efficiency is the National Energy Policy 2019 (NEP 2019). Among other things, this aims to enhance cost effectiveness and efficiency in the supply of petroleum products. It will also facilitate the development and deployment of renewable and alternative energy. The NEP 2019 will also promote the security of energy supply through diversification of energy sources at cost-reflective pricing, which should promote investment in the sector and thus scale up access to energy services in rural and urban areas. The NEP 2019 also considers climate change mitigation and adaptation, while advancing the sustainable development of the sector.
The following licences are issued in line with the EMA:
10.1 how would you describe the current real estate market and prevailing trends in your jurisdiction are any new developments anticipated in the next 12 months, including any proposed legislative reforms.
On 10 May 2021, the Lands and Deeds Registry (Amendment) Act (37/2021) was enacted. The act has changed several aspects of land registration in Zambia, as follows:
This legislation will be followed by further prescriptions issued by the minister of lands and natural resources setting out the specific processes to be complied with via statutory instrument.
In terms of trends and predictions, following these developments, it anticipated that the land registration process will shift to digital and electronic registration.
Further, on 11 May 2021, Zambia launched its National Lands Policy after nearly two decades of attempts at drafting, consultation and validation. The policy sets out a vision for a "transparent land administration and management system for inclusive sustainable development by the year 2035". The objectives of the policy include:
While these objectives are admirable, it remains to be seen whether they will be achieved in practice, especially over the next 12 months.
11.1 what are your top tips for the smooth conclusion of a real estate transaction and what potential sticking points would you highlight.
In conclusion, closing on a real estate transaction – whether residential or commercial – requires an immense amount of attention to detail, responsiveness and legal compliance on the part of all parties. Taking steps to minimise stress and effort, and to mitigate the risk of the transaction being voided, is key for the smooth closing of the transaction. One main sticking point to highlight is that real estate transactions can take a while – especially the stages that involve the Ministry of Lands, such as verification of the property details through an official search. The parties must be prepared to exercise a degree of patience throughout the process.
Co-Authored by Kabwe Nkunta
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Zambian land law recognises that people can own land in two ways; through a state lease where a person holds title deeds or through customary tenure where a chief, grants a person the right to occupy a piece of land. Although there are no title deeds that accompany customary tenure, a person can convert their property into a state lease and obtain title deeds for that piece of land. Someone may wish to do this for a number of reasons:
Title deeds are conclusive evidence of ownership and can only be challenged under strict circumstances customary land can be more easily challenged due to a lack of title the exact size, location and borders of the land are captured in the title deed whereas customary land sizes and borders are based on rudimentary estimates and landmarks perhaps the most important reason; you can access financing from a bank with title deeds; and you can sell land that is on title whereas government restricts selling of customary land as it should be “allocated” to subjects within a chiefdom.
Because the law recognises customary tenure it seeks to protect those that are holding land in this manner. Therefore, the law requires that anyone converting customary land into state land must gain the consent of those who may be affected by the conversion of the land if they wish to obtain title deeds. In addition, even the chief must consult their subjects who may be affected before they give their consent to the conversion.
The difficulty comes when you buy customary land and you are not aware of competing interests on that land. You may buy the land from a person or village headman who has ignored the interest of other members of the community that have a claim to that land. If you are not a member of the community it may be impossible to become aware of these demands. Once the land is converted and title deeds are obtained, you may find yourself being challenged by the community and losing your property. Whether you are buying state land or customary land, always ensure you consult professional advisors to make sure your interests are protected.
June 3, 2017
Property Advice
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The department’s core functions as enshrined in the Mines and Minerals Development Act is the administration of mining and non- mining rights. It has the sole responsibility of overseeing the process of granting and managing mineral licenses throughout the country.
The department’s key responsibilities can be broken down as follows:
The main objectives of the department are:
– To administer all mining rights and mineral processing licenses in accordance with the provisions of the Act and its subsidiary legislation;
– To ensure implementation of the minerals resources development policy
FUNCTIONS OF THE MINING CADASTRE DEPARTMENT
The department is divided into one section and four units as follows:
(i) The Mining Rights Registry – This unit serves as the department’s front office or inquiries and is the first point of call. It is responsible for the receipt and registration of mining and non-mining rights applications, applications for transfers, extensions, reductions, amendments and abandonments. It is the depository of the Priority and General Registers and is also the receiving and dispatch office for incoming correspondence and client notifications respectively. In addition, the Mining Rights Registry monitors and enforces mining and non-mining rights compliance with the Act.
(ii) The Licensing Unit – is the mining and non-mining rights application processing
office and is responsible for verifying that applications and licenses do not overlap and
have the correct spatial requirements (compliant coordinates).
The technical evaluation of applications function also falls within this category. All
applications received once cleared at validation stage have to undergo a thorough technical evaluation by a team of engineers to ascertain the strengths and viability of proposed exploration, mining or mineral processing projects.
The rest of the units are:
(iii) The Systems Administration Unit – which is responsible for the maintenance of the
Local Area Network (LAN), Management of the Cadastre Domain.
The Department runs three (3) integrated systems: Trimble Landfolio system, on-line
Mining Cadastre Transactional Portal and Map Portal systems.
(iv) The General Administration Unit – the section provides support services to the
department which include collection of license fees and area charges, maintenance of
accounts records, procurement of goods and services, management of vehicles,
maintenance of the Mining Cadastre building, general records management and
digitization, file delivery and cleaning of offices.
RENEWAL OF MINING RIGHT AND MINERAL PROCESSING LICENCE.
An application for renewal of a mining right or mineral processing license shall be made:
(i) Artisanal mining, three months before the expiry date of the license;
(ii) Small-scale mining, six months before the expiry date of the license; and
(iii) Large-scale mining, one year before the expiry date of the license; and
(c) For a mineral processing license, one year before the expiry date of the license.
Form XIII shall be used for renewal for the above types of licenses.
(3.) An application for renewal of a mining right shall be in Form XIII.
ALTERATION OF EXPLORATION OR MINING AREA
TRANSFER OR ASSIGNMENT OF MINING RIGHT OR MINERAL PROCESSING LICENCE
but not less than one hundred and twenty days before the expiry of the license; and
ABANDONMENT OF MINING RIGHT AREA
An application for the abandonment of all or any part of any land subject to a mining or exploration licence shall be in Form XVII set out in the First Schedule.
The Director of Mining Cadastre shall,
Where the Director of Mining Cadastre approves an application for the abandonment of land, grant the
Certificate of abandonment.
AMENDMENT OF MINING RIGHT AREA.
An application to amend a mining right or mineral processing license shall, upon payment of the fees set out in the Second Schedule, be made to the Director of Mining Cadastre in Form XI set out in the First Schedule.
Where the application for amendment relates to the inclusion of minerals –
This type of license is only given to indeginous Zambians and registered cooporatives
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The small scale Explorartion Rights are only granted to companies with minimum 5% Zambian shareholding.
The small scale Mining Rights are only granted to companies with minimum 5% Zambian shareholding.
FEES FOR ALL MINING AND NON MINING FEES 2016
Ministry of Infrastructure, Housing and Urban Development Stand Number 28, United Nations Avenue, P.O. Box 50235 RIDGEWAY, LUSAKA ZAMBIA Tel: +260 211 259342, Fax: +260 211 259342 Email:[email protected]
Copyright © 2022. SMART Zambia Institute.
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Registration fee - Charged by the Lands and Deeds Registry before the lease is registered and the certificate issued. Property transfer tax - This is 5% of the value of land and is paid to the Zambia Revenue Authority by the vendor. Cost: This varies with the locality of the land. Duration: 10 working days.
e. Consent to assign. f. Forms DR 53 (At least 2) g. Lodgment Schedules h. Relevant Deeds (At least 2) 2. Deed of Moiety Deed of Severance Deed of Exchange a. Original Certificate of Title for Deed of Exchange 2 Titles b. Lodgment Schedules c. Forms DR 53 d. Registration Receipt e. Relevant Deeds (At least 2) 3. Caveat a. Lodgment Schedule b.
Download Consent to Assign/Transfer (if approved). 9 days (after 45 days is automatically approved) 12 months. Notice! Before you proceed, be advised, it is the Government's policy that all users of e-government services in Zambia must be authenticated using an official digital signature (ZamPass).
The objective of ZILAS is to replace the Zambia Integrated Land Management Information System (ZILMIS) with a more robust and secure system. The MLNR has been deployed onto the Government Service Bus (GSB) to improve, effective and efficient service delivery. The digital linkages are being strengthened and configured across ministries ...
The disposal of land in Zambia either through sale or gift requires the approval of the State. Application has to be made to the Commissioner of Lands for consent to assign or transfer. Normally such consent is issued within a couple of days of lodging the application provided that all the requirements havebeenmet. Acquisition ...
Created Date: 3/26/2020 4:10:27 PM
(a) where the non-Zambian is a permanent resident in the Republic of Zambia; (b) where the non-Zambian is an investor within the meaning of the Investment Act or any other law relating to the promotion of investment in Zambia; Cap. 385 (c) where the non-Zambian has obtained the President's consent in writing under his hand;
The following is the procedure of acquiring Land in Zambia: 1. A Client applies for Land through the Office of the Commissioner of Lands stating t he NRC, contact details to Customer Service Centre. 2. In case of Council application, the Client should submit the following documents:
3. The necessary consent in writing to the Assignment hereby made has been duly obtained and Property Transfer Tax paid to the Collector of Taxes 4. It is hereby certified that for the purposes of any duty payable the aggregate amount of value for this transaction does not exceed One Hundred and Eighty Four Thousand Two Hundred and Ten Kwacha,
Bank of Zambia mid-rate as at the end of the day immediately preceding the day on which the provisional return is submitted. Where the return is submitted on a day preceded by one on which the Bank of Zambia has not published the mid-rate, the appropriate rate to be used shall be the last published Bank of Zambia mid-rate. Supporting Documents
All land to vest in the President. (1)Notwithstanding anything to the contrary contained in any other law, instrument or document, but subject to this Act, all land in Zambia shall vest absolutely in the President and shall be held by him in perpetuity for and on behalf of the people of Zambia. (2)Subject to subsection (4) and to any other law ...
15. (1) If a document which it is desired to register is not in Zambia, a copy of such document duly authenticated as a true copy thereof by a notary public under his signature and seal of office may be registered in lieu of such document without further authentication. Registration of notarially certified copies.
12 of 1997 Act No. 2 of 1961. 13 of 1994. Title. Interpretation. Presentation of documents relating to land. Documents to be accompanied by a form in duplicate. completed by the person interested under the document or by a legal practitioner practising in Zambia and having an office or place of business there.
The period fixed for obtaining State's Consent to assign shall be within Two (2) weeks of the date of payment of the final installment. 4. The date fixed for completion shall be within Two (2) weeks of the Vendor obtaining Property Transfer Tax receipt and Certificate which Certificate shall be applied for within Two (2) weeks of obtaining ...
The tax amount is a percentage of the realizable value, which is determined as the greater value between the free market value and the contract price. Current Property Transfer Tax Rate: As per the Zambia Revenue Authority (ZRA), the current Property Transfer Tax rate stands at 5%. However, it is advisable to check the prevailing rates annually ...
An Act to provide for the charging and collection of a tax based on the value realised from the transfer of certain property in the Republic; and to provide for matters connected with or incidental to the foregoing. [30th March, 1984. 1. This Act may be cited as the Property Transfer Tax Act, and shall come into operation on the 1st April, 1984 ...
The seller (or the seller's lawyers) must then obtain state consent to assign, which ordinarily takes a week or so. Having obtained state consent to assign, the seller or its lawyers then apply to the ZRA for an assessment of property transfer tax (PTT), based on the purchase price or market value of the property, whichever is higher in the ...
Therefore, the law requires that anyone converting customary land into state land must gain the consent of those who may be affected by the conversion of the land if they wish to obtain title deeds. In addition, even the chief must consult their subjects who may be affected before they give their consent to the conversion.
The numbers below (e.g., Section 1, Section 2, etc.) correspond to provisions in the form. Please review the entire document before starting your step-by-step process. • Introduction. Identifies the document as a consent to assignment of lease. Write in the date on which the consent will become effective (often the date on which it is signed).
ENACTED by the Parliament of Zambia. (1) This Act may be cited as the Property Transfer Tax (Amendment) Act, 2022, and shall be read as one with the Property Transfer Tax Act, in this Act referred to as the principal Act. This Act shall come into operation on 1st January, 2023. 2. Section 2 of the principal Act is amended—. Single copies of ...
Form XIII shall be used for renewal for the above types of licenses. ... grant consent to assign or transfer a mining right or mineral processing licence in Form XXX ... Proposals for employment and training of citizens of Zambia during the renewal period. Valid Tax clearance certificate (Issued under Income Tax Act Cap 323). ...