Online Reporter
Tapiwanashe Mangwiro
Senior Business Reporter
The Zimbabwe Revenue Authority’s (ZIMRA) demand for property and tenant information at Borrowdale Brooke has brought into sharp focus the Government’s renewed drive to close gaps in the taxation of rental income.
The tax authority recently requested details of property owners and tenants at the upmarket Borrowdale Brooke Golf Estate, including names, lease commencement dates and contact details.
The Borrowdale Brooke Homeowners Association said it had sought external legal advice and concluded that it was legally obliged to provide the information under Section 39 of the Income Tax Act, which empowers the Commissioner-General to require further information for the purposes of the Act.
While the request has raised questions among property owners and tenants, the move is consistent with a broader tax administration framework announced by the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, in the 2026 Budget.
The issue is essentially about bringing rental income and businesses operating from properties into the tax net.
Presenting the 2026 Budget in November last year, Minister Ncube said significant business activities undertaken in commercial and non-commercial buildings continued to escape taxation, while many property owners, managers and tenants remained unregistered with ZIMRA.
“Despite existing presumptive tax provisions, significant business activities undertaken in commercial and non-commercial buildings continue to escape the tax net,” Minister Ncube said.
He said existing legislation, although prohibiting the deduction of rent paid to unregistered property owners and managers, did not adequately address circumstances where buildings were managed informally or where property owners and managers collected rent without paying the requisite taxes.
Treasury’s response was to propose a framework that would make property owners and managers more visible to ZIMRA and give the tax authority greater access to information on properties being used for business.
Minister Ncube proposed that all commercial and non-commercial properties where business activities are conducted be mandatorily registered with ZIMRA.
Property owners and managers would also be required to submit quarterly tenant registers, occupancy lists and rental schedules to the tax authority.
In practical terms, this means ZIMRA would be able to establish who occupies a property, when the tenancy began and the rental arrangements involved.
The information is particularly important where businesses operate informally and may not be registered for tax.
Treasury also proposed shifting part of the responsibility for tax compliance to landlords and property managers.
Where informal-sector operators fail to comply voluntarily with their presumptive tax obligations, property owners or managers would be required to withhold 10 percent of rental income payable to such operators.
Minister Ncube further proposed that a property owner or manager who fails to register and account for Rental Income Tax, or fails to withhold the applicable presumptive tax, should face a penalty equivalent to the Rental Income Tax and presumptive tax payable, together with interest.
The proposals also provide for ZIMRA to temporarily close premises being used by businesses until the relevant compliance processes have been completed.
The measures took effect from 1 January 2026.
The Zimbabwe approach is not unusual internationally, although the precise method of taxing rental income differs from country to country.
In neighbouring Botswana, the letting and leasing of land, buildings and other properties is considered a business activity under the Income Tax Act.
The Botswana Unified Revenue Service (BURS) says rental income includes gross rent payable by tenants, as well as premiums or other consideration paid for the right to use or occupy property.
Landlords are required to declare rental income alongside other sources of income in their annual tax returns.
Botswana, however, permits certain costs associated with earning rental income to be deducted when determining taxable income. These include mortgage interest, rates and repairs, although capital expenditure such as mortgage principal repayments and improvements to property is not treated as an allowable deduction.
Kenya provides a different model, particularly for residential properties.
Its residential rental income tax applies to individuals and companies earning income from residential property and is charged at 10 percent of gross rent received.
Landlords are required to file returns monthly, while the tax may be paid monthly, quarterly, semi-annually or annually.
Unlike Botswana’s treatment, Kenya does not allow expenses, losses or capital allowances to be deducted from gross residential rental income when calculating the rental tax.
Zimbabwe’s current push is therefore less about introducing the concept of taxing rental income and more about improving the ability of the tax authority to identify taxable activity and enforce existing obligations.
The Borrowdale Brooke request illustrates this information-gathering component of the strategy.
For property owners and managers, the key implication is that rental arrangements and occupancy information are increasingly becoming part of the tax-compliance framework.
For tenants, particularly businesses operating informally, occupying premises does not shield them from tax obligations.
The broader objective for Treasury is to widen the revenue base by ensuring that economic activity taking place within properties is visible to the tax authority.
The rental tax measures therefore represent an attempt to close one of the less visible gaps in Zimbabwe’s tax system: income generated from property and business activity that, despite taking place in plain sight, has historically been difficult for the authorities to capture.
