Not every property transfer in Zambia attracts PTT. The Property Transfer Tax Act provides several exemptions - from family transfers to listed shares to charitable organisations. Understanding these exemptions can save you significant money on legitimate transactions.
Check the PTT on your transaction with our PTT calculator.
The exemptions
1. Family transfers
Transfers to immediate family members - spouse, child, adopted child, or step-child - are treated differently. PTT is charged only on the actual price received, if any. If the transfer is a gift (no money changes hands), PTT is nil. This allows parents to transfer property to children or between spouses without triggering a full 8% charge.
Important: The exemption applies to immediate family only. Transfers to siblings, cousins, parents, or in-laws are not covered and attract PTT at the full market value rate.
2. Group company reorganisations
When companies within the same group restructure, property transfers between group members may be exempt. The Commissioner General may determine a nil value for PTT purposes, provided the companies have been part of the same group for at least 3 years. This prevents companies from creating temporary group structures solely to avoid PTT.
3. Government transfers
Transfers to or by the Government of Zambia and foreign governments are exempt from PTT.
4. Charitable organisations
Organisations registered as charities under the Income Tax Act are exempt from PTT on property they receive. This encourages donations of property to charitable causes.
5. Co-operative societies
Co-operative societies registered under the Co-operative Societies Act are exempt, supporting communal and collective property ownership structures.
6. Property devolution on death
When property passes to immediate family members on the death of the owner, PTT does not apply. This covers inheritance by a spouse, children, adopted children, and step-children.
7. Listed shares on the LuSE
Shares that are listed and traded on the Lusaka Securities Exchange are exempt from PTT. This applies only to transactions through the exchange - private sales of listed company shares may still attract PTT.
8. Shareholder equity contributions
When a shareholder contributes property to a company as equity (in exchange for shares), this transfer is exempt from PTT. It must be a genuine equity contribution, not a disguised sale.
9. Share surrender or forfeiture
Shares that are surrendered or forfeited for no consideration are exempt, provided the surrender is not done to avoid PTT. ZRA can challenge transactions that appear to be structured specifically to circumvent the tax.
Common misconceptions
Buying from a family member is not exempt
If you purchase property from a family member at market value, PTT applies at the full rate. The family exemption only covers transfers where no money (or below-market money) changes hands. If you pay K500,000 for a house from your parent, PTT is 8% of K500,000 = K40,000.
Family exemption does not apply to non-family transfers
The actual-price rule under Section 5(4) only applies to immediate family. For all other transfers, ZRA can challenge declared values that appear below open market rates. If you sell a K1,000,000 property for K100,000 to a friend, ZRA may assess PTT on the open market value instead.
The exemption must exist at the time of transfer
You cannot retroactively claim an exemption. The conditions (family relationship, group membership duration, charitable status) must be in place when the transfer occurs.
For the full calculation method, see How to calculate PTT. To understand the penalties for late payment, read PTT late payment penalties.