Zanzibar has announced a new tax and residency program which would be made available for foreigners and tourists wanting to live and invest in the island.
This investor programme will provide foreign buyers the opportunity to enjoy a number of benefits, thereby luring investment and boosting Zanzibar as well as the broader Tanzania’s economy.
Real estate investors will also be able to acquire a residency permit as an investor, meaning the party will be allowed to live in Zanzibar as a non-citizen.
For a long time, Zanzibar has not been able to attract any notable real estate development, where countries like Mauritius, Dubai, Oman, Singapore and others have thrived after implementing this strategy due; the Investments Act of 2018 provided procedures and criteria for Strategic Investment Status (SIS) projects with incentives and allowances to real estate developers, however the same was not offered to those wanting to buy property in the country.
With the introduction of the new investment programme and its myriad of benefits, the developers are expecting to see great interest among buyers from abroad. In 2020, Zanzibar surpassed expected visitor numbers despite the pandemic, recording more than 620 000 foreign tourists in the 2020/21 financial year.
New tax and residency benefits for real estate buyers includes:
No Income tax on worldwide income and wealth
Resident permit for VILLA buyer plus Partner and up to four children under 20 years of age
First buyer pays only 50% of normal capital gains on sale of unit, at 5% instead of 10%
Foreign ownership allowed
Registration of ownership to be done by Zanzibar Investment Promotion Authority (ZIPA)
No VAT on unit rental or sales
Income tax is halved only on local income – 15% instead of 30% (applicable to foreigners only)
Repatriation of profit is allowed after tax
Residence permits are only valid for the duration the buyer owns the property (renewable every two years at $3050 for the main investor and $550 for each dependent)
No work permit is given, but may be applied for separately by the employer
No minimum stay is required to claim benefits