Introduction
In the past I have written many articles on Capital Gains Tax (“CGT”). For example, my article of 29 May 2025 was titled “Capital gains tax clearance certificate in property transfer”. Many purchasers are frustrated when delays are encountered during transfer of properties. Delays can be encountered at the CGT clearance certificate stage or at lodgement at the Deeds Office. In this article I explain some of the factors that may cause delays at the CGT clearance certificate stage.
Factors that may lead to delays in Capital Gains Tax clearance certificate
There are several possible factors, which include the following:
- Delays by the conveyancers in submitting the CGT application, for various reasons.
- Downtime of the ZIMRA’s TaRMS system.
- Queries raised by ZIMRA after submission of CGT application.
- Delayed payment by the seller of the assessed CGT amount.
Delays by the conveyancers
At times the conveyancer may delay submitting the application for CGT assessment due to many reasons such as the following:
- Large volumes of work.
- The purchaser not paying the deposits required for conveyancing fees.
- The seller or purchaser not providing the required documentation.
Delays caused by the conveyancer due to large volumes of work usually clears in a few days or weeks. However, delays due to non- payment by the purchaser of conveyancing fees may stretch at times. It will be unfair for the conveyancer to facilitate transfer and then struggle to recover conveyancing fees from the transferee.
Lack of adequate documentation may result in long or even inordinate delays to the CGT clearance certificate process. This is why experienced conveyancers make use of checklists of documents required for CGT purposes. Some of the key documents that should be certified include those listed hereunder.
- Current Deed of Transfer.
- Agreement of Sale.
- Proof of payment of the purchase price.
- Previous Agreement of Sale, at times.
- Registration documents of the seller and the purchaser. For natural persons it is their identity cards. For juristic persons it is their registration documents. For example, in the case of a company, ZIMRA will require the certificate of incorporation, CR6 (list directors), CR5 (registered address) and CR2 (shareholders).
- For juristic persons such as a company or trust, a resolution signed by the directors or trustees authorising the transaction and appointing a representative.
- Seller’s tax identification number (“TIN”), if already registered for CGT.
- Proof of residence, email address and contact numbers for the seller and the purchaser.
- Seller’s bank account details.
Downtime of the ZIMRA’s TaRMS system
Some delays may be encountered due to the downtime of the ZIMRA’s TaRMS system which may affect both registration of the seller for CGT or the actual submission of the CGT application.
Queries raised by ZIMRA
During the processing of a CGT application, ZIMRA may for good reasons, raise some queries on the application submitted by the conveyancer. Some of the queries may be on:
- The purchase price or value of the property, where ZIMRA is of the view that the assigned amount is lower than market value. ZIMRA may insist on an independent valuation of the property or additional comparative information.
- Key documents missing from the application or the documents not being certified by a commissioner of oaths.
- Inadequate documentation submitted with respect to a claim for the deduction of costs incurred for improvements made by the seller after purchasing the property.
- Inadequate documentation submitted by the seller with respect to an election for the rollover of CGT upon selling a principal private residence where the seller intends to acquire another principal private residence.
Delayed payment of assessed CGT obligation
It is a common problem for the seller to delay or fail to pay CGT when it is due. This happens where the purchaser pays the full purchase price directly to the seller without withholding CGT or the conveyancer is instructed by the purchaser to release the full purchase price to the seller without withholding funds for CGT. Ideally, the purchase price should be released to the seller upon completion of transfer.
Conclusion
Delays in obtaining the CGT clearance certificate can be so frustrating to both the transferee and the conveyancers. It is important to understand what may cause such delays and to take proactive action to avoid them.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.
