Legal Matters - Feb/Mar '25
Key changes to note regarding transfer duties and stamp duties
Key changes to note regarding transfer duties and stamp duties
As of 1 October 2024, a new legal framework has been applicable to the landscape of transfer duties and stamp duties. The below summary offers a brief explanation of the key changes which need to be taken into account when dealing with immovable property transactions in Namibia.TRANSFER DUTIES
Certain provisions of the Transfer Duty Act No. 14 of 1993 have been amended by Transfer Duty Amendment Act No. 6 of 2024, which came into force on 1 October 2024. The major changes that significantly impact the public are twofold:
Firstly, the definition of “property” has been widened to include a broader range of transactions. Unlike before, where a company, close corporation, or trust owns residential property, and the shares in such company or member’s interest in such close corporation or trust are transferred from one person to another, transfer duties will now be payable. This however only applies to residential property, which has been defined as meaning any dwelling house, holiday home, apartment or similar abode, or an improved or unimproved land zoned for residential use. The definition goes on to expressly exclude from its scope an apartment complex, hotel, guesthouse or similar structure consisting of five or more units held by a person which is being rented to five or more persons who, in relation to that person, are connected persons as defined in the Income Tax Act. Therefore, if a company, close corporation, or trust for example owns a commercial office building, no transfer duties will be applicable to the transaction.
Secondly, where the purchaser in a conveyancing transaction is a natural person, the monetary cap is raised from N$600 000 to N$1 100 000, and the monetary brackets have been increased as follows:
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Therefore, where a natural person is acquiring property, no transfer duties will be applicable on the first N$1 100 000 of the consideration (in the case of a sales transaction) or value (in the case of a donation transaction) of the property. Where the acquirer of the property is not a natural person (but rather, for example, a company or a close corporation), transfer duties remain payable at the same rate as before – 12%.
It is important to note that transfer duties become payable on the date of acquisition, which is defined as the date on which the transaction was entered into, irrespective of whether the transaction was conditional or not or was entered into on behalf of a company already registered or still to be registered. Therefore, where a transaction was entered into (or signed) before the 1st of October 2024, the previous legal position shall be applicable.
STAMP DUTIES
The Stamp Duties Act No.15 of 1993 has been amended by the Stamp Duties Amendment Act No. 7 of 2024, which also came into force on 1 October 2024.
The most important change to take note of in this context is that, where the acquirer of the property is a natural person, the monetary cap has similarly been lifted as follows:
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These new stamp duties will apply to all documents stamped and executed after 1 October 2024.
Again, where the acquirer is a person other than a natural person, the legal position as to stamp duties remains unchanged, and so N$12 will be payable for every N$1 000 or part thereof of the consideration or value of the property.
The cost calculator available on Dr Weder, Kauta & Hoveka Inc’s app and website may be consulted to calculate the approximate costs of a conveyancing transaction. Readers are invited to contact Abe Malherbe at telephone number +264 61 275 550 for further guidance.
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