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RBZ suspends property policy
September 19, 2011
In a major climb
down the Reserve Bank of Zimbabwe (RBZ) has indefinitely suspended
the implementation of recently introduced policy measures requiring
proceeds from disposal of immovable property valued at $50 000 or
more to be paid in tranches.
meant to enhance foreign exchange monitoring, management and improving
market liquidity remittance of sale proceeds from disposal of immovable
property, had ruffled feathers on the property investment market.
took effect on August 1 amid an outcry from property dealers.
RBZ senior division
chief (exchange control) Morris Mpofu said on Monday the suspension
of the measures would give the central bank ample time to address
various misconceptions on the policy.
suspension should not be misconstrued as the opening of the floodgates
for the externalisation of funds or the liberalisation of the capital
account. Authorised dealers shall note that, for balance of payments
(BOP) purposes, the capital account remains restricted,” Mpofu
dealers are further advised that in the normal course of Exchange
Control’s monitoring and surveillance activities, the on-site
and off-site inspections shall continue to be conducted regularly
and shall include inspection of these remittances.”
the suspension of the policy was a welcome development as it was
likely to have created an “underground” property market.
Mpofu said balance
of payments reporting purposes authorised dealers should upload
property related transactions on the computerised exchange control
batch application system within 24 hours of transfer of funds.
Under the policy,
banks were compelled to pay sellers of immovable property in tranches
after an initial $50 000 payment.
property worth over $50 000, the seller will not be paid the whole
amount of the cost of the property, but an initial payment of $50
000 would be transferable at once after all statutory deductions,
and the remainder would be paid over one year.
In his Mid-Term
Monetary Policy Review, RBZ governor Gideon Gono said it was
important that due to tight foreign exchange liquidity conditions
in the domestic market exacerbated by absence of BOP support, the
capital account remained regulated.
to manage capital outflows which impact negatively on the BOP position
and liquidity on the local market, remittances arising from disposal
of immoveable property by residents shall be remittable in tranches
over a one-year period,” Gono said.
Under the regulations
only permanent emigrants with approved formal emigration, deceased
estates whose beneficiaries were resident outside Zimbabwe and individual
foreigners with documentary proof of transferring funds into Zimbabwe
for the purchase of immovable property, were eligible to get 100%
remittance of their sale proceeds at once.
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