This archive report was first published on 5 July 2021.
Published on July 5, 2021, Zanzibar has rolled out a new tax and residency programme to entice expatriates to live and invest in the island.
The move follows significant infrastructure and tourism-friendly initiatives that have helped Zanzibar weather the COVID-19 pandemic.
Until now, the island had incentives for real estate developers but not property buyers, resulting in a lack of foreign investment in the sector.
Unlike Mauritius, Dubai, Oman, and Singapore, which have successfully attracted both developers and buyers, Zanzibar has struggled to attract significant foreign investors.
The new tax and residency plan offers several benefits to foreign buyers, including a reduced capital gains tax rate of 5% for first-time buyers and a 15% income tax rate instead of 30%.
Foreign ownership is permitted, and foreigners are allowed to hold residence permits for the period they own the property, renewable after 24 months at a cost of $3,050 for the investor and $550 for each dependant.
Additionally, foreigners in the real estate business will not be required to have a business license for the first three months, and there will be no corporate tax for the first five years.
Expatriates will also be allowed to repatriate profits from the property after tax with a 100% exemption on withholding tax on interest paid into foreign bank accounts.
