Tax on property income in Namibia
Taxation Researcher | May 25, 2022
Effective Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | nil | 6.66% | 6.50% |
| Click here to see a worked example | |||
| Source: Global Property Guide research |
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INDIVIDUAL TAXATION
Nonresidents are taxed on their Namibian-sourced income. Married couples are taxed separately.
The tax year is from 01 March of the current year to 28 February of the succeeding year. The tax year 2021 is from 01 March 2020 up to 28 February 2021. The tax year 2022 is from 01 March 2021 up to 28 February 2022. The tax year 2023 is from 01 March 2022 up to 28 February 2023.
INCOME TAX
Income is taxed at progressive rates.
INCOME TAX 2019-2022 |
|
| TAXABLE INCOME, NAD (US$) | 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$107,143 |
| Source: Global Property Guide | |
RENTAL INCOME
Rental income is taxed at progressive rates. Taxable income is computed by deducting the 15% VAT for leasing property, income-generating costs, and depreciation expense from the gross rental income. Depreciation of new buildings is computed 4% annually over a period of 20 years.
Stamp Duty
Stamp duty is payable on the aggregate rent over the period of lease according to the following scale:
STAMP DUTY |
|
| PERIOD OF TIME | STAMP DUTY RATE |
| Up to 5 years | 0.5% |
| 5 - 10 years | 0.8% |
| 10-20 years | 1% |
| Over 20 years | 1.5% |
A lease for a definite period with no provision for renewal must be stamped for the entire period.
A lease for a definite period with an option for renewal, must be stamped according to the aggregate of the a) original lease period; b) definite period of continuance; and c) two years if the lease is to continue for an indefinite period after the original lease period.
A lease for an indefinite period must be stamped for two years only.
If the aggregate rent exceeds the selling price of the leased property, duty is payable only on the selling price. If the lease is terminated before the end of the lease period, a refund of a proportion of the duty can be claimed.
Value Added Tax (VAT)
VAT is levied on rental income at 15%.
CAPITAL GAINS
There are no capital gains taxes in Namibia.
Transfer Duty
Transfer of property is subject to transfer duty. Transfer is generally levied at a flat rate of 12% on the value of property.
For individuals, transfer duty is levied at progressive rates. The transfer duty rates vary, depending on the property classification.
TRANSFER DUTY ON PROPERTY 2013-2022 |
|
PROPERTY VALUE, NAD (US$) |
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.