2024 Property Tax Explained
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2024 Property Tax Explained

During the presentation of the national budget, Professor Ncube proposed the introduction of a Wealth Tax, levied at a rate of 1% on the market value of residential properties with a minimum value of US$100,000. However, after a debate in the parliament Professor Ncube made some changes to the tax. You will not be taxed for your “primary residence” The tax will apply for additional properties you have, if they’re worth over US$250K (not the previously proposed U$100K) ZIMRA may collect the tax via councils and the maximum that a property can pay is US$50K/year.

 

Some people may be wondering what property tax is and what benefits it has on the country. Property tax is tax charged on real estates or immovable assets, which includes residential, commercial industrial, and farms. These are charged by local authorities in many countries. They are charged on the assessed value of the land, building or a combination of them. Different Countries and local authorities value real estate differently and also apply different tax rates on the properties. However, property tax remains the major source of revenue for many municipalities.

 

Property tax has strong potential for revenue generation especially for urban areas and cities. It is possible to collect a significant amount of revenue from the taxation of properties. This projected growth expected in developing countries will also affect urban Zimbabwe’s population and provide an opportunity for the country’s tax base to grow as there will be a need for urban infrastructure growth.

 

While people are still looking at the downfall of this new tax, others are already planning how to avoid it. According to Mr Kaseke some people will sell high value properties and buy those below 250k as a direct strategy to legally dodge property tax. Another source also mentioned how this new tax will discourage the building of high value properties.

 

As we await for this new tax to be implemented we hope the people will be open minded and understand its benefits.