Multi-Family Investment Properties in ZanzibarIsland homes withwhite beaches and slow rhythm

Real Estate in Zanzibar, Tanzania

Why Invest in Property in Zanzibar

Zanzibar, a semi-autonomous archipelago off the coast of Tanzania, has become a highly sought-after destination for real estate investment. With its white-sand beaches, turquoise waters, UNESCO-listed Stone Town, and a rapidly growing tourism sector, the island offers compelling opportunities for lifestyle buyers, hotel developers, and income-seeking investors. In recent years, the government has introduced reforms to attract foreign capital, allowing foreigners to own property through specific schemes and offering residence permits linked to real estate purchases.

Types of Property Available

Zanzibar’s real estate market includes a variety of residential and commercial options:

• Beachfront villas — Luxury homes with direct access to the sea, often sold as part of resort communities.
• Serviced apartments and condos — Located near Stone Town, Kiwengwa, Paje, or Nungwi, with high rental appeal.
• Boutique hotels and lodges — For sale or co-development, especially in tourist-heavy zones.
• Development land — Plots for resort or residential development, particularly along the east coast or in emerging southern zones.
• Eco-resorts — Rising interest in sustainable and nature-based lodging near Jozani Forest and secluded beaches.

Ownership and Legal Framework

While Zanzibar is part of Tanzania, it has its own land laws:

• Land is state-owned — Buyers receive a 33- to 99-year leasehold via the Zanzibar Investment Promotion Authority (ZIPA).
• Foreign ownership is allowed — Through government-approved projects or under the “Strata Title” scheme in designated developments.
• Residence permit linked to investment — Properties above $100,000 (apartments) or $150,000 (houses) may grant residence status for the buyer and family.
• Registration — All leases and transfers are handled through ZIPA and the Registrar of Lands in Zanzibar.

Prices and Market Dynamics

Prices depend on location, beach access, and development stage:

• 1-bedroom condo (Kiwengwa, Paje): $90,000 – $180,000
• 2- to 3-bedroom beachfront villas: $250,000 – $600,000
• Luxury resort villas (Nungwi, Kendwa): $700,000 – $1.5 million+
• Hotel plots with permits: $25 – $80 per sq. meter
• Boutique hotels (operating): $500,000 – $3 million depending on capacity and location

The east coast (Pongwe, Matemwe, Jambiani) offers some of the best long-term appreciation potential due to pristine beaches and new resort projects.

Rental Returns and Tourism Demand

Zanzibar’s robust tourism sector supports strong short-term rental income:

• Airbnb and boutique rentals — High occupancy during peak season (December–March, June–September).
• Resort-managed units — Offer hands-off investment and guaranteed yield models (4%–7%).
• Gross yields — 6% – 10% for well-located beachfront or resort-linked properties.

Sample nightly rates:

• 1-bedroom condo in Paje: $90 – $160
• 2-bedroom beachfront villa: $250 – $450
• Luxury 4-bedroom villa: $500 – $900

Top Investment Zones in Zanzibar

Leading areas for real estate include:

• Stone Town — Heritage buildings and boutique hospitality projects; UNESCO protections may limit modifications.
• Nungwi and Kendwa — High-end tourism, nightlife, and strongest resale value for beachfront villas.
• Paje and Jambiani — Popular with kitesurfers, digital nomads, and eco-resorts.
• Kiwengwa and Pongwe — Rapid development, mid-to-high-end projects, accessible beaches.
• Fumba and south coast — Government-backed sustainable projects like Fumba Town attract eco-conscious buyers.

Buying Process and Taxes

The purchase process for foreigners involves:

• Choose a developer or agent — Properties must be within approved foreign-investment zones.
• Sign sales agreement and deposit — Usually 10% to reserve the unit.
• Due diligence and ZIPA approval — Ensures land is registered, lease valid, and foreign rights recognized.
• Final payment and registration — Property is registered under a long-term lease, and residence permit is optionally processed.

Costs:

• Stamp duty: 3%
• ZIPA registration: ~1%–2%
• Legal fees: 1%–2%
• No capital gains tax if held via registered company (subject to structuring)

Who Should Invest in Zanzibar

Zanzibar appeals to:

• Lifestyle investors — Seeking tropical homes with beach access and residency rights.
• Buy-to-let landlords — Targeting income from tourism with resort-managed units.
• Eco-tourism developers — Interested in sustainable hospitality along undeveloped coasts.
• Digital nomads and second-home seekers — Especially from Europe, the Middle East, and South Africa.

Conclusion

Zanzibar is emerging as a top-tier tropical real estate market in East Africa. Its blend of natural beauty, investment-friendly legislation, and growing tourism make it ideal for property buyers seeking both lifestyle and returns. While foreign ownership requires adherence to leasehold structures, the government has created clear pathways for compliant and secure investment. With beach properties still competitively priced and demand surging, Zanzibar offers significant upside for early entrants into this maturing real estate destination.