Zanzibar Offshore Property Market Opens to Foreigners for First Time
The East African nation is, for the first time in history, is allowing non-Tanzanian residents to invest in property on the tropical island.
This, coupled with strong economic growth, is expected to boost the property market this year.
According to a 2017 Africa Report by Knight Frank, Tanzania is one of a small group of African nations to have maintained GDP growth in excess of 5% in 2016, as it is an importer of commodities, and so benefited from low oil prices as well as growth in private consumption and investment.
Large scale investment
Global Property Guide reports that Tanzania is experiencing large scale investment and development in real estate projects for residential, industrial and commercial purposes.
One such development is the Blue Amber Resort by Pennyroyal Zanzibar Ltd, which is set to be the largest resort in Africa.
Initially launched as Zanzibar Amber Resort in early 2017, the mixed use development spans 411 hectares of Indian Ocean Coastline. Upon completion, the luxury resort will boast five international hotels – including the Ritz Carlton and Anantara Hotels – as well as East Africa’s first signature 18-hole golf course designed by professional golfer and former world number one Ernie Els, and deep water mooring on the marina. It will also house a water park, underwater restaurant and nightclub.
Blue Amber will also offer both Tanzanian and non-Tanzanian residents an opportunity to invest in premium residential property in Zanzibar.
The first residential phase, comprising 47 double-storey villas set in a secure private estate with sweeping views of the ocean, lakes or golf course, is under construction and is expected to be complete by 2020.
Non-Tanzanian residents will be eligible to buy property within the luxury community on 99-year leases with the option to extend ownership by 49 years, says Saleh Said, managing director of the Blue Amber Resort.
Prices for villas in phase one of the Blue Amber Resort start from US$672,000. For investors, the property in luxury surroundings is likely to deliver returns in line with or in excess of that in Tanzania’s capital city of Dar es Salaam.
Knight Frank data shows that four-bedroom executive houses in prime locations within the capital garnered prime rental prices of US $4 500 per month and prime yields of 6%.
Tax benefits for property owners
An investment is Blue Amber Zanzibar also offers significant tax benefits for property owners, including a tax rate of 15% earned on local income and no tax on worldwide income, this is realized by the development’s status as a strategic investment project. Property owners will also benefit from not having to pay capital gains tax, stamp duty or inheritance tax on properties purchased.
In addition, property owners – along with spouses and children under 25 years of age – are also eligible for residence permits in Zanzibar, with residency status valid for as long as investors remain property owners.