ZIMRA Introduces 15% Presumptive Rental Tax on Commercial Properties

HARARE — Commercial property owners in Zimbabwe, including those living in the diaspora, are set to face additional tax obligations following the introduction of a new Presumptive Rental Income Tax by the Zimbabwe Revenue Authority (ZIMRA).

The tax, introduced under the Finance Act, 2025, took effect on 1 January 2026 and imposes a 15 percent levy on gross rental income earned from commercial properties used for business, trade, or professional activities. The measure forms part of the government's broader efforts to expand the tax base and strengthen revenue collection amid growing fiscal pressures.

Under the new framework, landlords, property owners, lessees, and sub-lessees receiving rental income from commercial tenants are required to register with ZIMRA and submit monthly tax payments. Unlike conventional income tax systems that allow deductions for expenses, the presumptive rental tax is calculated on gross rental income, meaning property owners cannot deduct maintenance costs, management fees, loan repayments, or other operating expenses before calculating the tax due. The tax applies exclusively to commercial properties and does not affect residential rentals. However, buildings with both residential and commercial units will have the commercial portion of rental income subjected to the new levy.

Zimbabweans living abroad who own commercial properties in the country will also be required to comply with the new tax regime. According to ZIMRA, non-resident landlords must appoint a local representative to manage their tax affairs and ensure compliance with monthly filing requirements. The move is expected to affect a significant number of diaspora investors who own office buildings, retail shops, warehouses, and other commercial properties across Zimbabwe.

In a notable development, estate agents and other intermediaries handling rental payments have been designated as statutory agents for tax purposes. This means property managers and rental collection agents may be held accountable for ensuring that the presumptive rental income tax is paid before rental proceeds are transferred to landlords. Tax experts say the provision is intended to improve compliance and reduce opportunities for tax evasion within the commercial property sector.

The legislation also grants ZIMRA powers to recover unpaid taxes directly from tenants where landlords fail to comply. In such cases, tenants may be instructed to remit the tax authority's portion directly to ZIMRA before paying the balance of the rent to the landlord. The law provides protections for affected tenants, preventing landlords from increasing rent or evicting tenants for a period of three months as a result of complying with such directives.

The new presumptive tax operates independently of existing tax obligations. Commercial rental properties that are already subject to Value Added Tax (VAT) will continue attracting VAT at 15.5 percent, in addition to the new 15 percent presumptive rental income tax. Landlords are also required to continue collecting any applicable 10 percent informal traders' tax from qualifying tenants. This means some commercial rental transactions could now attract multiple layers of taxation.

ZIMRA has warned that property owners who fail to comply with the new requirements face significant penalties. Failure to pay the tax may attract a penalty of up to 100 percent of the outstanding amount, effectively doubling the liability owed to the tax authority. Property owners already registered under the self-assessment income tax system before 31 December 2025 will continue declaring rental income through that framework.

However, those not previously registered must enrol under the presumptive rental income tax system and begin making monthly submissions. The introduction of the tax signals the government's determination to widen revenue collection channels, with commercial property owners becoming the latest sector targeted in Zimbabwe's expanding tax landscape.

Presumptive Rental Income Tax Zimbabwe