Global Property Guide

Financial Information for Residential Property Buyers


Namibia's rental income tax is high

October 04, 2017

INDIVIDUAL TAXATION

Nonresidents are taxed on their Namibian-sourced income. Married couples are taxed separately.

The tax year is from 01 March of the current year to 28 February of the succeeding year. The tax year 2017 is from 01 March 2017 up to 28 February 2018. The tax year 2018 is from 01 March 2018 up to 28 February 2019.

INCOME TAX

Income is taxed at progressive rates.


INCOME TAX

TAXABLE INCOME, NAD (US$) TAX RATE
Up to 50,000 (US$3,571) 0%
50,000 - 100,000 (US$7,143) 18% on band over US$3,571
100,000 - 300,000 (US$21,429) 25% on band over US$7,143
300,000 - 500,000 (US$35,714) 28% on band over US$21,429
500,000 - 800,000 (US$57,143) 30% on band over US$35,714
800,000 - 1,500,000 (US$107,143) 32% on band over US$57,143
Over 1,500,000 (US$107,143) 37% on all income over US$107,143
Source: Global Property Guide

RENTAL INCOME
Rental income is taxed at progressive rates. Taxable income is computed by deducting the 15% VAT for leasing property, income-generating costs, and depreciation expense from the gross rental income. Depreciation of new buildings is computed 4% annually over a period of 20 years.

Stamp Duty

Stamp duty is payable on the aggregate rent over the period of lease according to the following scale:

STAMP DUTY

PERIOD OF TIME STAMP DUTY RATE
Up to 5 years 0.5%
5 - 10 years 0.8%
10-20 years 1%
Over 20 years 1.5%

A lease for a definite period with no provision for renewal must be stamped for the entire period.

A lease for a definite period with an option for renewal, must be stamped according to the aggregate of the a) original lease period; b) definite period of continuance; and c) two years if the lease is to continue for an indefinite period after the original lease period.

A lease for an indefinite period must be stamped for two years only.

Namibia homes for sale

If the aggregate rent exceeds the selling price of the leased property, duty is payable only on the selling price. If the lease is terminated before the end of the lease period, a refund of a proportion of the duty can be claimed.

Value Added Tax (VAT)

VAT is levied on rental income at 15%.

CAPITAL GAINS
There are no capital gains taxes in Namibia.

Transfer Duty

Transfer of property is subject to transfer duty. Transfer is generally levied at a flat rate of 12% on the value of property.

For individuals, transfer duty is levied at progressive rates. The transfer duty rates vary, depending on the property classification.

TRANSFER DUTY ON PROPERTY

PROPERTY VALUE, NAD (US$)

TAX RATE
Up to 600,000 (US$42,857) 0%
600,000 - 1,000,000 (US$71,429) 1% on band over US$42,857
1,000,000 - 2,000,000 (US$142,857) 5% on band over US$71,429
Over 2,000,000 (US$142,857) 8% on all value over US$142,857

PROPERTY TAXES

Municipal Property Tax

Local authorities or municipalities levy annual taxes on owners of immovable properties located within their boundaries. The applicable tax rates are set by the local municipalities.

For the tax year 2009-2010, the rates applicable in the municipality of Windhoek in respect of real properties are 0.001578% of the site value per month and 0.000434% of the improvement value per month.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are generally taxed at a flat rate of 32%. Income-generating expenses are deductible when calculating taxable income.

Comments

juandre | July 20, 2010

Goodday

id like to know if i buy a building and most of the rental income goes to pay of the buildings debt, repaires, insurance and so on wil i stil be taxed or is tax only for a certain amount of turnover

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