Zimra introduces 15% presumptive rental income tax

The Zimbabwe Revenue Authority (ZIMRA) has introduced a Presumptive Rental Income Tax, effective 1 January 2026, following the enactment of the Finance Act 2025, in a move aimed at widening the tax base and improving compliance in the property rental sector.

Under the new tax regime, rental income earned from business tenants will be subject to a flat presumptive tax rate of 15 percent of gross rental income. The tax is treated as a final tax, meaning no deductions, credits or allowances may be claimed against it.

The tax applies to landlords, property owners, lessors and sub-lessors who receive rental income from leasing premises for business purposes. ZIMRA has clarified that tenants who fall under the presumptive tax framework will be responsible for withholding the tax at source and remitting it directly to the tax authority on behalf of the landlord.

All property owners who lease premises for business use are now required to register with ZIMRA, regardless of whether they were previously registered for income tax. Returns must be submitted by the 5th day of the month following the month in which the rental income is earned, while payment of the tax is due by the 10th of that following month.

Estate agents and other intermediaries involved in property management have also been brought into the compliance net. ZIMRA said such agents must ensure that the presumptive rental tax has been paid before disbursing rental proceeds to property owners.

The tax authority stressed that the introduction of the presumptive rental income tax does not affect the application of Value Added Tax (VAT) on rentals where VAT is already chargeable. VAT obligations will therefore continue to apply independently of the new presumptive tax.

ZIMRA warned that failure to comply with the new requirements could result in the recovery of unpaid tax, together with penalties of up to 100 percent of the tax due.

As part of transitional arrangements, ZIMRA said taxpayers who were already registered under the self-assessment income tax system as at 31 December 2025 will continue to be taxed under the normal income tax rules. However, new landlords entering the market from January 2026 will be required to comply fully with the presumptive rental income tax framework.

ZIMRA has urged both landlords and tenants to regularise their tax affairs promptly, warning that enforcement measures will be applied to curb non-compliance as the authority moves to strengthen revenue collection in the property sector.