AN amendment to the Transfer Duty Act of 1993 will considerably reduce the cost of buying and selling houses.

Outgoing Finance Minister Saara Kuugongelwa-Amadhila tabled the amendment on Thursday.

Once the bill is passed, there will be no transfer duty payable on any property costing less than N$400 000.

Transfer duty of one per cent of the property value is applicable to properties costing between N$400 000 and N$800 000.

On properties costing between N$800 000 and N$1,5 million, the transfer duty will be five per cent plus a basic amount of N$4 000.

For property costing more than N$1,5 million, a basic amount of N$39 000 will be charged plus eight per cent of the property price exceeding N$1,5 million.

In the case of farmland bought by previously disadvantaged Namibians under the Affirmative Action Loans Scheme (AALS), no transfer duty has to be paid up to N$500 000.

For land costing between N$500 000 and N$1 million, transfer duty of one per cent will apply to the amount exceeding N$500 000. This means that no transfer duty will have to be paid for the first N$500 000 by AALS buyers.

For land priced more than N$1 million, three per cent will apply for the remainder of the price exceeding N$1 million, plus a basic amount of N$5 000.

Non-AALS beneficiaries and buyers who are not a natural person, for example companies, will have to pay transfer duty of 12 per cent on land and the price brackets do not apply.

"These amendments will leave more money in the hands of private buyers and homeowners and will benefit especially people from lower income groups," Finance Minister Kuugongelwa-Amadhila said.

The Minister had promised this financial relief to property buyers a year ago during her 2009-10 budget speech.

A short debate ensued with Prime Minister Nahas Angula criticising the high prices of commercial farms.

"The current high land prices have nothing to do with economics. I ask the Lands Ministry to come with serious amendments [to the existing Land Acts] to stop all loopholes with regard to farm sales," Angula said.