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Everything you need to know before buying real estate is included in our Mozambique Property Pack
Understanding property taxes and fees in Mozambique is crucial before investing in real estate. The country has a comprehensive tax system with specific rates, deadlines, and penalties that foreign investors must navigate.
Property purchases in Mozambique involve multiple taxes including SISA (property transfer tax) at 2%, stamp duties at various rates, annual IPRA property tax at 0.4% for residential properties, and various administrative fees. Professional costs and DUAT land-use rights add additional expenses that can total 5-7% of the property value in the first year alone.
If you want to go deeper, you can check our pack of documents related to the real estate market in Mozambique, based on reliable facts and data, not opinions or rumors.
Property taxes and fees in Mozambique include a 2% SISA transfer tax, 0.2% stamp duty on deeds, 0.4% annual IPRA property tax, plus various administrative and professional costs.
Total closing costs typically range from 5-7% of property value, with ongoing annual costs of approximately 0.5-1% for property taxes and DUAT fees combined.
| Tax/Fee Type | Rate/Amount | Example on MZN 5,000,000 |
|---|---|---|
| SISA (Property Transfer Tax) | 2% of property value | MZN 100,000 |
| Stamp Duty on Deed | 0.2% of property value | MZN 10,000 |
| Land Registry Fees | ~1% of property value | MZN 50,000 |
| Notary Fees | MZN 32,500-130,000 (flat) | MZN 65,000 (average) |
| Annual IPRA Property Tax | 0.4% of property value | MZN 20,000/year |
| Professional Costs | 2-3% of property value | MZN 100,000-150,000 |
| Total First Year Costs | 5-7% of property value | MZN 345,000-375,000 |
Fact-checked and reviewed by our local expert
Alexia Vieira
Founder and President of Fundacion Khanimambo and Humbi Farm
What taxes and fees are due at closing on a standard purchase, who pays each one, and what do they come to in MZN on a MZN 5,000,000 property?
At closing on a standard property purchase in Mozambique, buyers face several mandatory taxes and fees that total approximately 3.2% of the property value before professional costs.
The SISA (property transfer tax) represents the largest closing cost at 2% of the property value, totaling MZN 100,000 on a MZN 5,000,000 purchase. This tax is always paid by the buyer and must be settled before the deed can be registered.
Stamp duty on the sale deed costs 0.2% of the property value, adding MZN 10,000 to your closing costs. Land registry fees typically run around 1% of the property value, contributing another MZN 50,000. Notary fees range from MZN 32,500 to MZN 130,000 as a flat fee, with most standard residential transactions falling around MZN 65,000.
The seller typically pays real estate agent commissions of 3-5% of the purchase price, though this doesn't directly affect your closing costs as the buyer.
Total mandatory closing costs for the buyer on a MZN 5,000,000 property amount to approximately MZN 225,000 (4.5%), excluding professional legal and survey costs.
What is the exact property transfer tax rate, how is the taxable base calculated, and what would the total be on MZN 5,000,000?
Mozambique's property transfer tax is called SISA (Imposto sobre Transmissões Onerosas) and has a standard rate of 2% for most residential property transactions.
The taxable base for SISA is calculated as the higher of either the declared transaction price or the official tax value registered with the municipal authorities. This prevents undervaluation of properties to reduce tax liability.
The tax structure is generally flat at 2%, though special cases involving offshore entities or certain commercial transactions may face a higher rate of 10%. For standard residential purchases by individuals, the 2% rate applies uniformly without progressive bands or thresholds.
On a MZN 5,000,000 property purchase, the SISA tax would be exactly MZN 100,000 (2% Ă— MZN 5,000,000), assuming the transaction price equals or exceeds the official tax valuation.
Is there any stamp duty on the deed and mortgage, what are the rates, and how much would that be on a MZN 3,000,000 mortgage?
Mozambique imposes stamp duty on both property deeds and mortgage documents, with different rates applying to each transaction type.
For the property deed, stamp duty is charged at 0.2% of the sales price or registered property value, whichever is higher. On a MZN 5,000,000 property, this equals MZN 10,000 in stamp duty.
Mortgage stamp duty varies based on the loan term and security type. For guarantees or security interests, the rate is 0.3% of the secured amount. For loans, the rates are 0.03% for terms under one year, 0.4% for loans over one year, and 0.5% for terms of five years or longer.
On a MZN 3,000,000 mortgage with a term over one year (typical for property purchases), the stamp duty would be 0.4% of the loan amount, totaling MZN 12,000.
Both stamp duties are typically paid by the buyer as part of the closing process and must be settled before document registration can proceed.
What are the notary, land registry, and cadastral fees, what documents are required, and what is the timeline to register title for a MZN 5,000,000 purchase?
Notary fees in Mozambique are charged as flat amounts rather than percentages, typically ranging from MZN 32,500 to MZN 130,000 for standard residential transactions.
Land registry fees are calculated as approximately 1% of the property value, meaning MZN 50,000 for a MZN 5,000,000 purchase. Cadastral record fees are often included in the registry process but may add an additional MZN 2,000 to MZN 5,000.
| Required Documents | Purpose | Processing Time |
|---|---|---|
| Property Title Deed | Proof of seller ownership | Immediate (if available) |
| ID/Residence Documents | Buyer identification | 1-2 days |
| SISA Payment Receipt | Tax compliance proof | Same day payment |
| Power of Attorney | Representative authorization | 3-5 days (if needed) |
| DUAT Certificate | Land use rights proof | 2-4 weeks (if applicable) |
| Property Valuation Report | Official value assessment | 1-2 weeks |
| Sale/Purchase Contract | Transaction terms agreement | 1-3 days drafting |
The complete registration process typically takes 2-6 weeks from document submission to final title handover, depending on the complexity of the transaction and local registry office efficiency.
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What are the DUAT application, issuance, and annual fees for a 500 m² residential plot?
DUAT (Direito de Uso e Aproveitamento da Terra) represents land-use rights in Mozambique, with fees varying by province and location within each province.
Application fees for DUAT typically range from MZN 3,000 to MZN 10,000 for residential plots, depending on the specific municipality and plot size. Issuance fees follow a similar range, often matching the application fee amount.
Annual DUAT fees are calculated based on the plot area, location category (urban vs. rural), and intended use. For a 500 m² residential plot in an urban area, annual fees typically range from MZN 500 to MZN 2,500 per year.
Urban locations command higher rates than rural areas, and commercial or tourism projects face higher fees than standard residential use. The calculation formula is generally area Ă— rate per square meter Ă— location multiplier.
For a 500 m² residential plot in a typical urban area like Maputo or Beira, expect to pay approximately MZN 6,000-8,000 in initial DUAT fees (application + issuance) and MZN 1,500-2,000 annually thereafter.
What are the typical professional costs I should budget, and what are realistic market ranges in MZN for each?
Professional costs for property purchases in Mozambique typically add 2-3% to your total transaction expenses, covering essential legal and technical services.
Legal and due diligence services represent the largest professional cost, usually charged as 2-3% of the purchase price. For a MZN 5,000,000 property, expect to pay MZN 100,000 to MZN 150,000 for comprehensive legal representation and property verification.
Translation services for documents cost between MZN 5,000 and MZN 20,000, depending on the volume and complexity of documents requiring translation from Portuguese to English or other languages.
Sworn property valuations or appraisals typically cost MZN 10,000 to MZN 30,000, required for mortgage applications and tax assessments. Survey and topographical services range from MZN 15,000 to MZN 40,000, particularly important for land boundary verification and construction planning.
It's something we develop in our Mozambique property pack.
What is the annual municipal property tax, what rate applies by property type, and how much would I pay yearly on a property valued at MZN 5,000,000?
Mozambique's annual municipal property tax is called IPRA (Imposto Predial sobre o Rendimento Autárquico), with rates varying by property type and use category.
Residential properties face an IPRA rate of 0.4% of the official taxable value, while commercial properties are taxed at 0.7% annually. The tax is calculated based on the property's official assessment value, not necessarily the market purchase price.
For a property with an official value of MZN 5,000,000 used for residential purposes, the annual IPRA tax would be MZN 20,000 (0.4% Ă— MZN 5,000,000).
IPRA is paid in two installments each year, with payments due in January and June. Late payments incur penalties of 2-3% per month plus potential fixed fines, making timely payment essential for avoiding additional costs.
Property owners receive annual tax bills from their municipal authority and can pay through designated tax offices, municipal cashiers, or approved banking partners.
What taxes apply to rental income, and what is the monthly net after tax on MZN 30,000 rent?
Rental income taxation in Mozambique depends on whether you're an individual owner or hold the property through a company structure.
Individual property owners face a 14% withholding tax on rental income when the tenant is another individual, or 20% when the tenant is a company. This withholding tax is generally final for individuals whose rental activity isn't their main business.
On monthly rent of MZN 30,000 (MZN 360,000 annually), an individual owner would pay 14% withholding tax of MZN 4,200 per month, leaving a net monthly income of MZN 25,800.
Companies holding rental properties pay regular corporate income tax at 32% on rental profits, unless they qualify for specific exemptions. Companies must also handle VAT obligations if their annual rental income exceeds the VAT threshold.
Residential rental properties are exempt from VAT, but commercial rental income above the threshold requires 17% VAT to be charged to tenants and remitted to tax authorities.
Which permit fees apply for new construction, is VAT charged on materials and services, and what's the total tax burden on a MZN 2,000,000 build budget?
New construction and major renovation projects in Mozambique face both permit fees and VAT obligations that significantly impact project budgets.
Construction permit fees vary by municipality and project value, typically ranging from MZN 20,000 to MZN 60,000 for a MZN 2,000,000 residential construction project. These fees cover plan approval, building permits, and occupancy certificates.
VAT at 17% applies to most construction materials and contractor services, making it the largest tax component of construction projects. On a MZN 2,000,000 build budget, VAT alone would total MZN 340,000.
The total tax and fee burden on a MZN 2,000,000 construction project would be approximately MZN 380,000-400,000, comprising VAT (MZN 340,000) plus permit fees (MZN 40,000 average), representing about 19-20% of the total construction budget.
Some specialized construction equipment and certain building materials may qualify for VAT exemptions or reduced rates, particularly for social housing or tourism development projects with approved status.
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What capital gains tax applies on sale, how is the gain calculated, and what would the tax be if I bought at MZN 4,000,000 and sold at MZN 6,000,000 after 3 years?
Capital gains tax in Mozambique applies to property sales with a rate of 32% on taxable gains for both residents and non-residents, as well as companies.
The taxable gain is calculated as 50% of the total capital gain, meaning only half of your profit is subject to tax. The gain itself is determined by subtracting the acquisition cost (including purchase price and allowable expenses) from the sale price.
For a property bought at MZN 4,000,000 and sold at MZN 6,000,000 after three years, the total gain would be MZN 2,000,000. The taxable portion is 50% of this gain, equaling MZN 1,000,000.
Capital gains tax would be 32% of the taxable gain: 32% Ă— MZN 1,000,000 = MZN 320,000. This represents 5.33% of the sale price or 16% of the total profit.
Allowable deductions include the original purchase price, acquisition costs (legal fees, taxes paid), improvement costs, and selling expenses, which can reduce the taxable gain if properly documented.
Are there incentives or exemptions available, what are the eligibility rules, and how much would they save on the examples above?
Mozambique offers several property tax incentives and exemptions, particularly for first-time buyers, social housing, and tourism development projects.
First-home buyers may qualify for SISA exemption or rate reductions, provided the property serves as their primary residence and meets specific value thresholds. The application must be submitted before the purchase transaction is completed.
Social housing projects approved by government authorities can receive full SISA and IPRA exemptions, saving significant amounts on both purchase and ongoing costs. Tourism development projects in designated Special Economic Zones (SEZ) may qualify for reduced or zero SISA and IPRA rates.
| Incentive Type | SISA Savings (MZN 5M property) | Annual IPRA Savings |
|---|---|---|
| First Home Buyer | MZN 50,000-100,000 | MZN 10,000-20,000 |
| Social Housing Project | MZN 100,000 (full exemption) | MZN 20,000 (full exemption) |
| SEZ Tourism Project | MZN 75,000-100,000 | MZN 15,000-20,000 |
| Heritage Property | MZN 50,000-100,000 | MZN 10,000-20,000 |
| Affordable Housing | MZN 100,000 (full exemption) | MZN 20,000 (full exemption) |
Heritage property renovations may qualify for partial SISA and IPRA reductions, while affordable housing initiatives with government approval can receive full exemptions from both taxes.
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What are the official payment channels and deadlines for each tax, and what are the late-payment penalties?
Mozambique's property tax payment system requires specific channels and adherence to strict deadlines to avoid penalties and legal complications.
SISA must be paid at designated tax offices or through approved banks before the property deed can be registered. Payment cannot be delayed without preventing the transaction from completing. IPRA payments are due in two installments annually, with deadlines in January and June each year.
Official payment channels include municipal tax offices, designated bank branches, and municipal cashiers. Online payment systems are limited and not universally available across all municipalities, making in-person payments the most reliable option.
1. SISA payment receipts (essential for deed registration)2. IPRA annual payment certificates3. Stamp duty payment proofs4. DUAT fee payment records5. All registry and notary fee receiptsLate payment penalties start at 2-3% per month on overdue amounts, plus potential fixed fines determined by each municipality. Interest compounds monthly, making prompt payment crucial for avoiding escalating costs.
It's something we develop in our Mozambique property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property taxes and fees in Mozambique represent a significant portion of real estate investment costs, with buyers facing approximately 5-7% of property value in first-year expenses.
Understanding the specific rates, deadlines, and payment procedures for SISA, IPRA, stamp duties, and professional costs is essential for successful property investment in Mozambique's growing real estate market.
Sources
- KPMG Africa Fiscal Guide - Mozambique
- Mozambique Houses - Property Sale Taxes
- TTA Advogados - Tax Rules for Property Sector
- The AfricanVestor - Foreigners Buying Land in Mozambique
- VDA - Project Finance Mozambique
- ACIS Mozambique - Rural Land Guide
- PWC Tax Summaries - Mozambique Individual Taxes
- KPMG Mozambique Fiscal Guide 2015-2016