Tax on property income in Botswana
Taxation Researcher | August 18, 2021
Effective Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 7.50% | 24.42% | 30.96% |
| Click here to see a worked example | |||
Source:
Disclaimer
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INDIVIDUAL TAXATION
Nonresidents are taxed on all income derived within Botswana. Married couples are assessed and taxed separately.
The tax year is 01 July of one year up to 30 June of the next year. The tax year 2021 is from 01 July 2020 up to 30 June 2021. The tax year 2022 is from 01 July 2021 up to 30 June 2022.
INCOME TAX
Income is taxed at progressive rates. A special set of tax bands apply to nonresident individuals.
INCOME TAX - NON-RESIDENTS 2021 |
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| TAXABLE INCOME, BWP (US$) | TAX RATE |
| Up to 84,000 (US$8,400) | 5% |
| 84,000 – 120,000 (US$12,000) | 12.50% on band over US$8,400 |
| 120,000 – 156,000 (US$15,600) | 18.75% on band over US$12,000 |
| Over 156,000 (US$15,600) | 25% on all income over US$15,600 |
| Source: Global Property Guide | |
INCOME TAX - NON-RESIDENTS 2020 |
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| TAXABLE INCOME, BWP (US$) | TAX RATE |
| Up to 60,000 (US$7,200) | 5% |
| 60,000 - 90,000 (US$10,800) | 12.50% over US$7,200 |
| 90,000 - 120,000 (US$14,400) | 18.75% over US$10,800 |
| Over 120,000 (US$14,400) | 25% on all income over US$14,400 |
| Source: Global Property Guide | |
RENTAL INCOME
Rental income earned by nonresidents from properties in Botswana is subject to progressive tax rates. Any expenses that are unavoidably incurred in producing rental income are deductible. These expenses include interest on loans, improvements, irrecoverable rent, and others.
Rental income is subject to withholding tax at a rate of 5%. This tax is credited against the taxpayer´s final income tax liability.
CAPITAL GAINS
There is no separate capital gains tax in Botswana. Capital gains realized from selling real property is subject to income tax under a special regime. Capital gains are gross sales price less acquisition costs, improvement costs, and transaction costs.
CAPITAL GAINS TAX |
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| TAX BASE , BWP (US$) | TAX RATE |
| Up to 18,000 (US$1,800) | 0% |
| 18,000 - 72,000 (US$7,200) | 5% on band over US$1,800 |
| 72,000 - 108,000 (US$10,800) | 12.50% on band over US$7,200 |
| 108,000 - 144,000 (US$14,400) | 18.75% on band over US$10,800 |
| Over 144,000 (US$14,400) | 25% on all value over US$14,400 |
| Source: Global Property Guide | |
PROPERTY TAX
There are no property taxes in Botswana.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by nonresident companies are subject to corporate income tax at a flat rate of 30%. Income-generating expenses are deductible when calculating taxable income.