Property buying process in Malawi
Get to know the process of acquiring property in Malawi.
Process of buying property in Malawi
- An interested Buyer, through his lawyer, will carry out a Title Search at Ministry of Lands Registry to vet and ensure a clear title.
- The interested Buyer will put forth an offer letter (prepared by your Reynolds Portfolio agent).
- If the offer is accepted by Seller, your Reynolds Portfolio agent will formally notify (with Acceptance Letter) the Buyer that the offer has been accepted.
- The Acceptance Letter is copied to the Seller’s lawyer and the Buyer’s lawyer.
- Seller’s lawyer uses the Acceptance Letter to prepare a Sale Agreement. The Sale Agreement is sent to the Buyer’s lawyer for perusal. Once approved, it is forwarded to the Buyer for signature.
- Upon signature, the buyer is required to pay a deposit, typically 20%.
- The Buyer will use the deposit to pay capital gains tax at Malawi Revenue Authority (MRA). The signed Sale Agreement together with a Valuation Report from a registered Valuer will be required by the MRA to assist them in arriving at the tax which must be payable as a result of the sale. When you pay the tax, MRA will give you a Tax Clearance Certificate.
- The Seller must clear all outstanding City Rates to the City Council and a Rates Clearance Certificate will be issued.
- Consent to change ownership of the property must be obtained from the government or the freehold owner. Tax Clearance Certificate and Rates Clearance Certificate will be required to obtain the consent.
- The Purchaser then makes final payment to Seller.
- The duration of the entire purchase process can take up to 1 month.
SELLING TO NON-MALAWIAN BUYERS: Under the latest land laws of the country, a non-Malawian citizen is prohibited from owning any type of land EXCEPT if the land is being acquired for investment purpose. However, there is a requirement for an advertisement to run for 21 days, for which a Malawian will be given priority if he/she can afford the price offered by the non-Malawian buyer.
Expenses for Buyer
- Legal Fees: Approximately 1-2% of purchase price
- Stamp Duty: 1.5% of purchase price
- Property Valuation Fee: 0.5% of property value after the valuation
Expenses for Seller
- Capital Gains Tax: 30% of "capital gain"
- Property Valuation Fee: 0.5% of property value after the valuation
- Legal Fees: approximately 1-2% of purchase price
- Estate agent commission: normally 5-10% of the purchase price
Help me find property
Whether you are looking for residential or commercial property to buy, Reynolds can help you move forward.
