The small expatriate market is concentrated along the coastal areas of Oyster Bay. The supply of good quality housing is extremely limited; expansion or contraction of an embassy or donor institution directly influences demand and pricing in the short run.
The supply of upper and middle level residential units is between 6,000 and 8,000 units, Knight Frank reports. There are new constructions and developments that are expected to put a further squeeze on rents.
Non-citizens may only acquire land (leasehold) for investment purposes, subject to the approval of the Tanzania Investment Center (TIC) for the mainland or the Zanzibar Investment Promotion Authority (ZIPA) for Zanzibar. All land in Tanzania is owned by the state, and can only be leased to individuals for five to 99 years.
The rent for a 200 sq. m beach estate in Zanzibar would be about TZS2.36 million (US$1,811) monthly. Yields here too are around 9% to 12%.
Capital Gains: Capital gains from the disposal of Tanzanian assets by non-residents are taxed at 20%.
Inheritance: No inheritance or gift taxes are levied in Tanzania.
Residents: Resident individuals are taxed on their globally-sourced income at progressive rates, up to 30%.
Meanwhile, the islands of Zanzibar offer a more relaxing atmosphere. Nestled in the vast Indian Ocean, visitors can bask in endless sand, sea, and surf in the two main islands of Unguja and Pemba. But remember, although the Zanzibaris are very hospitable people, tourists should be very sensitive to their culture and religion. With 95% of the population Muslim, tourists are expected to dress conservatively when away from the beach.
The economy is still highly dependent on agriculture and foreign aid. However in recent years, the transition towards a multi-party democracy has led to the government adopting more liberal economic policies to attract foreign direct investment. The average annual GDP growth from 2000 to 2005 was a healthy 6.5%. The economy grew 6.9% in 2005.
Inflation was at historic low of 4.1% in 2005, down from 47.7% in 1988.
Real GDP per capita increased by 43.3% between 1984 and 2005. Despite these gains, however, the poverty rate is still high at 74%. Because of the prolonged drought in 2006, over 3 million people were at risk of starvation.
There are moves for Zanzibar’s separation from the 40 year union. In 2005, the president of Zanzibar inaugurated a new flag. Zanzibar has had its own parliament, laws and president since the start of the union.