Namibia: Overview

RENTAL YIELDS

Yields are high in Windhoek at 9.5% - 10%

In Windhoek property typically costs US$457 – US$523 per sq. m. (NA$3,320 to NA$ 3,800). A 200 sq. m. house would cost about NA$712,812 (US$98,031). For a similar sized property, the rent would be around NA$5,643 (US$776) per month.

Yields are around 9.5% to 10% for properties of up to 200 sq. m.. Bigger properties have yields of around 7.5%.

Beachfront properties in Swakopmund are priced at US$131 to US$694 per sq. m. (NA$950 – NA$5,050), and yield around 5.5% to 9%.

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TAXES AND COSTS

Namibia's rental income tax is high

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	nil	6.4%	8.0%
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Source: Disclaimer

Rental Income: Rental and other income above NA$24,000 (US$3,301) is taxed at 17.5%, while income greater than NA$200,000 (US$27,506) is taxed at 35%.

Capital Gains: There is no capital gains tax.

Inheritance: There is no inheritance tax.

Residents: Residents and non-residents are taxed at the same progressive rate.

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BUYING GUIDE

Total transaction costs in Namibia are moderate

The total roundtrip transaction cost, i.e., the cost of buying and selling property, is around 9% to 16%. This includes the 8.05% agent’s fee (inc VAT) and transfer duties that range from 1% to 8%.

To register the property nine procedures needed, and are typically completed in about 28 days.

Real estate transactions are negotiated and concluded in Namibian dollar (NA$). With strong links with South Africa, South African rand (ZAR) is accepted as legal tender in Namibia. The exchange rate is pegged at NA$1=ZAR1.

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LANDLORD AND TENANT

Namibia rental practice is pro-landlord

Rent: All terms of lease agreements including rent and rent increases can be freely negotiated between the parties.

Effectiveness of legal system: Even if the court system is cumbersome and time consuming, the landlord is protected by an automatic rent interdict on the tenant’s movables. Such movables cannot be removed from the property, until judgment by the Court has been given.

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ECONOMIC GROWTH

Diamonds and democracy

Quality diamonds were discovered in 1908, which prompted an influx of Europeans, specifically Germans, eager to invest. The country produced 1.5 million carats in 2002, with export earnings estimated at $500 million. Other mineral resources in the country are uranium, copper, lead, zinc, gold, silver, tin, cadmium, semiprecious stones, tantalite, phosphate, sulfur and salt.

Tourism revolves around ecotourism and attracts travelers from Africa, as well as Europeans.

The country’s politics is relatively stable and democratic. Presidential elections occur every five years, with each election considered fair and democratic by international observers despite minor irregularities. Like most Third World countries, an oversized bureaucracy slows down business and investment. Poverty and unemployment are high. HIV/AIDS remains a national priority.

The economy grew by an annual average of 3.8% from 1994 to 2005. Real wages grew by about 5% in 2005. Inflation was at 5.8% in 2005. The prime lending rate was 11.75%, lower than the 17% registered in 2002 and 24% in 1998.