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Malawi Capital Gains Tax Guide 2026

Malawi does not have a separate capital gains tax. Instead, capital gains are treated as ordinary income and taxed at the taxpayer's marginal rate — progressive PAYE rates (0–35%) for individuals or CIT rates (30%/25%) for companies. Gains on property disposals are subject to tax. The principal private residence is exempt from CGT. The tax is administered by the Malawi Revenue Authority (MRA) under the Taxation Act.

Overview — Capital Gains in Malawi

Capital gains tax in Malawi is governed by the Taxation Act. Unlike many jurisdictions that have a separate CGT regime, Malawi includes capital gains as part of ordinary income. A chargeable gain arises when a person disposes of an asset for consideration exceeding the allowable cost. Disposal includes sale, exchange, gift, transfer, or deemed disposal. Resident individuals and companies are taxed on worldwide chargeable gains; non-residents are taxed only on gains from Malawian assets.

CGT Treatment — Included in Ordinary Income

Capital gains are included in the taxpayer's ordinary income and taxed at the applicable marginal rate. For individuals, this means gains are added to other income and taxed under the progressive PAYE brackets (0%, 25%, 30%, 35%). For companies, gains are included in taxable profit and taxed at the CIT rate (30% standard, 25% for small companies). The chargeable gain is calculated as: Consideration received minus (Acquisition cost + Incidental costs). Allowable costs include the original purchase price, legal fees, valuation costs, and capital improvements.

Principal Residence Relief

Gain from the disposal of an individual's principal private residence is exempt from CGT, provided the property has been occupied as the main residence throughout the period of ownership. Additional residences (second homes, investment properties) are fully chargeable.

Property & Real Estate Gains

Gains from the disposal of real property (land and buildings) are subject to tax as ordinary income. A withholding tax may apply on property disposals. The purchaser may be required to withhold tax on the consideration and remit it to MRA. Non-residents disposing of Malawian property are subject to tax on the gain, with no principal residence relief available.

FAQs

How do I calculate my chargeable gain?

The chargeable gain is the difference between the disposal proceeds (net of selling costs) and the acquisition cost (plus enhancement expenditure). The gain is added to your other income and taxed at your marginal rate.

Can I offset capital losses?

Yes, capital losses may be offset against capital gains in the same year. Unrelieved losses may be carried forward but cannot be offset against other income.

What assets are exempt from CGT?

Principal residence, personal effects, and certain specified assets may be exempt. Shares and securities are generally not subject to CGT as separate assets.

Disclaimer

This guide provides general information about Malawian capital gains tax for the 2026 tax year. Tax laws may change. Always consult with a qualified Malawian tax advisor or the Malawi Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.

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