By Dr Goodluck Temu

The recent Zanzibar Investment Act No. 10 of 2023 has created several incentives to promote investment in Zanzibar. Some of those incentives are extended to individuals buying properties in Zanzibar.

What are the incentives?

Buyer of property in Real Estate Project of a value not less than One Hundred Thousands United States Dollars may be granted the following incentives;

  • Resident permits for the buyer, spouse and his four children who are under twenty years old;
  • Fifty per cent exemption on stamp duty;
  • One Hundred percent foreign ownership is allowed, and
  • One Hundred per cent repatriation of sales proceeds after tax.

What do these incentives mean?

  • The overall policy in land ownership is that land is reserved for Tanzanians only. Direct interests in land are generally not available to foreigners. However, the law has created possibilities for acquiring derivative interests, for example, through investment promotion authorities or long-term leases.
  • These changes in Zanzibar create an exception: foreigners can now have a direct interest in land when buying from approved projects.
  • These changes are also logical. A person who buys a property for residential purposes can use the same property to apply for a resident permit in the country. This is extended to the spouse and up to four children.

What do these incentives mean for investment decisions?

  • Prospective investors in real estate are now assured of the protection of their investment. Additionally, they can use the same acquired properties to reside in Tanzania together with their families.
  • On the same note, the changes make Zanzibar a more appealing investment destination. Investors may also consider making it their second or even retirement home. Further, family-owned businesses can find it much more appealing to invest in Zanzibar.
  • Investors can access funding from available global sources because the Act now makes it possible to export borrowed capital from the proceeds of the invested sum. Additionally, the disposal of the acquired property will be more appealing as the export of sales proceeds after tax is now guaranteed.
  • Buying a home in Zanzibar now should be considered an investment decision. When done appropriately, with proper advise, return of the said investment is guaranteed.

Disclaimer

This article is not intended to replace professional advice. No one should rely exclusively on
the information provided as a substitute for seeking professional advice. The writers or the Firm
are not liable for any use of the information contained herein and do not guarantee the
accuracy of its contents from the date of publication to the date of usage.
For contact: temu@africorp.co.tz

AfriCorp Attorneys
Phone Number: +255 22 211 0660
Amverton Office Park, Plot No 64 Lugalo Street
Dar es Salaam, Tanzania