119
estate agent may also be involved. All of these costs separate the amount paid by the buyer from the
amount received by the seller and make the land market less agile, slowing economic development.
D. Registration fees or stamp duty
The regulations contain a number of prescribed fees set in colonial times that, while generating
revenues, have become a nuisance as monetary values have eroded. For example, the stamp duty
applied to real estate transfers is a nominal rate held over from colonial times. The Zambian 1994
budget message announced its abolition as of midnight, 28 January 1994.
E. Planning department scrutiny fees
All construction in Zambia, other than on agricultural holdings, requires a permit issued by
the relevant city or council, and a scrutiny fee is normally charged for this review. The fees are based
on an estimated minimum development investment per square meter and vary among councils. The
current scrutiny fee for Lusaka is 0.25 percent. Thus a 100 square meter building costing K115,000
per square meter, or K11.5 million, would require a scrutiny fee of K28,750. A scrutiny fee of
K40,000 is charged in Lusaka for the review of subdivision and consolidation.
Various other problems are leftovers from the previous government of Zambia. For instance,
there is still a widely shared reluctance to recognize the fact that land values change rapidly and by
large amounts when product markets or other relevant data change. Some who write draft legislation
regularly propose legal language that is ambiguous. The proposed reforms in the Land Titles Act and
the Land Registration Act are good examples of positive draft laws that need sharper focus and
clarification.
The problems of the land market will not end with better laws. Those land laws are
administered by government entities, some of which have employees who are not dedicated to
minimizing cost and maximizing service to taxpayers.
From inertia, tradition, political concerns, or other causes, the Republic of Zambia issues 99-
year negotiable leaseholds instead of freehold titles. Freehold tenure would be no more secure, as the
Second Republic showed when the president simply decreed that all freehold titles must be converted
into 99-year leases. More worrisome is that neither leaseholders nor hypothetical freeholders have very
firm guarantees against expropriation or other actions by the state that may take their property without
fair prior compensation. The best estimates available so far indicate that recording a sale of a leasehold
interest may take several days; seeking, obtaining, and recording a new leasehold with the consent of
a tribal chief may take several months or even years (see chapter 2). The actual cost of buying or
subleasing land and improvements includes the explicit taxes and fees plus the value of the time of
the interested parties (or their attorneys or other agents). Based on the above-mentioned time
requirements, transfer costs would appear to be considerable.
F. Revenues of the Lands Department
The GOZ collects money from persons to whom state land has been allocated under three
headings: registry fees, state consent fees, and annual ground rents. (There was formerly a stamp tax
as well, but it was abolished in early 1994.) Table 4.1 shows that the revenues obtained from these
sources have varied sharply over time in current kwacha terms. Because the year-to-year changes were