Tunisia: Overview

RENTAL YIELDS

Yields are moderate in Tunisia

Gross yields for properties in Tunis range from 4.8% to 7.43%, with prices at €2,100 to €2,900 per sq. m. Rent for a 70 sq. m. property is around €800 a month while rent for a 200 sq. m. property can reach €2,600 a month.

Properties within the suburbs of Tunis and new development have lower prices at €1,500 to €1,700. Beachfront developments and those within Carthage and Hammamat have prices from €1,600 to €1,800. Rent figures for new developments and beach properties are not readily available as they mainly cater for the local market and first time buyers.

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TAXES AND COSTS

Income tax rates range from low to high in Tunisia

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	8.3%	14.9%	17.7%
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Rental Income: Nominal income tax rates in Tunisia are from 15% to 35%. A standard deduction of 30% is given to cover income-generating expenses leading to effective tax rates ranging from 8% to 18%.

Capital Gains: Individuals are taxed on capital gains at the same rate as income tax.

Inheritance: The transfer of real estate property through inheritance is taxed at 5%, 25% or 35%.

Residents: Tunisian residents are taxed on worldwide income.

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BUYING GUIDE

Buying costs in Tunisia are low

Roundtrip transaction costs are around 9.11%. The transfer tax is 5% while real estate agent’s commission is typically 3%. Various registration fees add up to around 1.11%. The buyer pays for all the costs.

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LANDLORD AND TENANT

Tunisian law is pro-landlord in the free market segment

Rent: The rent can be freely negotiated. There is no legal maximum annual rent increase for free market tenancies, but any increase must be stipulated in the contract (typically, 5%).

Tenant Eviction: At term, the lease may be renewed by tacit agreement for the same period, or ended, if a notice is given by either of the parties in advance through a bailiff or by registered mail. Once the notice is given, eviction is swift. The court system is highly efficient.

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ECONOMIC GROWTH

One of Arab world's best reformers

The Republic of Tunisia (pop 10.1 million) is considered as one of the most stable countries in the Arab region. It is more Mediterranean than Arab in nature. With its prime spot in the Mediterranean coast, it serves as a gateway between Africa to Europe, especially France. GDP per capita is around US$3,148.

Tunisia gained its independence from France in 1956 under President Habib Bourguiba, and has consistently pursued secular policies. Tunisian women have long had full legal status, including the power to run and own businesses, own bank accounts and passports, to transmit citizenship if married to a foreigner. Polygamy has been abolished and free education is compulsory.

With the accession of President Zine El-Abidine Ben Ali through a bloodless coup in 1987 (he recently won another term in April 2004), Tunisia’s economic policies are more than ever geared towards liberalization and participation in the global market.

2006 GDP growth is expected to be 5.9%, and growth for the years 2003, 2004, and 2005 was 5.6%, 5.8% and 5% (per capita figures come in lower, at 4.5%, 3.5% and 3.6% respectively).

There has been consistently low inflation (the average annual rate of inflation 1994-2003 was 2.67%), and a strong tourism and manufacturing sector. Tunisia acceded to the GATT in 1990, is a founding member of WTO, and has an Association Agreement with the EU.