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‘Reduced property transfer tax to lower house prices’

SOME stakeholders have welcomed the proposal by Government to reduce property transfer tax from 10 to five percent saying the move will result in a reduction in mortgages and also the price of houses.
Both NHA-MKP Estate Development Limited and the Bankers Association of Zambia (BAZ) are happy with the proposal.
NHA-MKP Estate Development Limited chief executive officer Charles Holland said the proposal by Minister of Finance Alexander Chikwanda has elated the estate developers as it will see them sell off property easily and at an affordable price.
Mr Holland said in an interview on Sunday that estate developers are expected to review property prices following this proposal.
“We are very delighted with this news and we are hopeful that as many Zambians as possible will be able to own new houses now,” he said.
Mr Holland, however, appealed to Government to consider reviewing the value added tax (VAT) on new houses so that they can be sold tax-free.
“We want this tax to be reviewed and if possible done away with so that houses can become affordable for [more] people to own decent houses,” Mr Holland said.
During the KPMG-sponsored post budget discussion breakfast yesterday, BAZ chief executive officer Leonard Mwanza said the reduction in property transfer tax will see a reduction in mortgages by banks.
Mr Mwanza said the reduction in property transfer will encourage banks to ease mortgages for their customers and eventually attract the public to obtain them and enable them to build their own houses after accessing affordable mortgages from banks.
“I tell you that the reduction in property transfer tax will encourage banks to reduce their mortgages and this will benefit their public,” he said.
On Friday, during the budget presentation, Mr Chikwanda said the current property transfer tax at 10 percent has discouraged people from completing property transfer transactions as it is prohibitive.
“I, therefore, propose to reduce the rate of property transfer tax on land and shares to five percent to enhance compliance,” he said.