Your Guide to Buying Property in Zanzibar: Legal Framework and Process

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For foreign investors eyeing Zanzibar's turquoise coastline, the question isn't whether the island offers compelling returns—occupancy rates exceeding 90% during peak season and double-digit yields speak for themselves. The question is how to navigate a legal framework that prohibits freehold ownership while still providing secure, long-term property rights.

The answer lies in understanding Zanzibar's leasehold system, a structure that has opened the archipelago to international capital while preserving government control over land. For buyers willing to work within these parameters, the process offers surprising clarity—provided they follow established procedures and avoid common pitfalls.

The Legal Foundation

Zanzibar's Land Tenure Act of 1992 establishes a fundamental principle: all land within the islands, occupied or unoccupied, is public land vested in the President on behalf of the people¹. This constitutional provision means freehold ownership—the outright purchase of land—is unavailable to anyone, citizen or foreigner.

Instead, the government issues Rights of Occupancy, essentially long-term leases that grant usage and development rights. For foreign investors, the standard arrangement involves a 99-year renewable lease, typically structured in 33-year phases². While this may seem restrictive compared to freehold markets, the practical reality is more nuanced.

"Under the leasehold system, you can enjoy and use your property as if you owned the land," explains a guide published by Eden Law Chambers, a Zanzibar-based legal firm specializing in property transactions. "You pay an annual ground rent to the government, but property owners have the freedom to use and develop their land"³.

These leaseholds are fully transferable. Owners can sell, lease, bequeath, or mortgage their interest⁴. The Condominium Act No. 10 of 2010 extended these rights specifically to apartment units, allowing both Zanzibaris and foreigners to purchase condominiums with the same 99-year renewable lease structure⁵.

The Purchase Process

Successfully acquiring property in Zanzibar requires following a specific sequence of steps, each with its own timeline and cost implications. The process typically begins long before any money changes hands.

Step 1: Property Identification and Verification (2-3 weeks)

Once a buyer identifies a potential property, the first critical step involves verifying ownership. This requires conducting an official search at the land registry—known locally as "uhakikisha"—to confirm the seller holds valid title and the property carries no encumbrances⁶.

This verification proved essential following a 2024 World Bank assessment that found approximately 42% of examined sites in Tanzania suffered from "land-related issues, including missing title deeds"⁷. In Zanzibar specifically, problems often involve missing survey plans or unclear succession claims, issues that must be resolved before proceeding.

The local Sheha—a community leader with administrative authority—plays an important role in this verification process, particularly for properties that may not have formal Right of Occupancy documentation but are held through traditional means such as inheritance⁸.

Step 2: Due Diligence and Legal Representation (2-4 weeks)

Engaging a Zanzibar-licensed attorney is not optional. Foreign contracts signed abroad are unenforceable locally unless notarized and lodged in Zanzibar⁹. Legal fees typically range from $3,000 to $7,000 depending on transaction complexity and property value¹⁰.

Attorneys coordinate several parallel workstreams during due diligence: confirming survey boundaries, checking for environmental compliance (particularly critical for coastal properties subject to setback regulations), and verifying that any off-plan development holds proper approvals from the Zanzibar Investment Promotion Authority (ZIPA)¹¹.

Step 3: ZIPA Approval (3-4 weeks)

For purchases exceeding $100,000 in ZIPA-approved projects—which encompasses most new developments targeting foreign buyers—investment authority approval is mandatory¹². This registration serves dual purposes: it formalizes the foreign investment and qualifies the buyer for residence permit eligibility.

The 2023 Zanzibar Investment Act, ratified in February 2024, streamlined this process significantly. The new "Class C11 real-estate residence permit" costs $550 for two years ($300 for East African Community citizens), covers spouses and up to four children, and renews automatically while the property is held¹³. While it doesn't confer work rights, it eliminates the previous requirement for quarterly border runs—a meaningful quality-of-life improvement for property owners spending extended time on the island.

Step 4: Purchase Agreement and Registration (2-3 weeks)

Once due diligence clears and ZIPA approval is secured, parties execute a formal purchase agreement. This document must outline all material terms: buyer and seller identities, precise land location and boundaries, purchase price, and payment schedule¹⁴.

The agreement requires registration to be legally enforceable. This step involves submitting the document to the appropriate registry office along with supporting documentation from the due diligence phase.

Step 5: Payment and Transfer (Variable: 12-24 months for staged payments)

Most new developments operate on staged payment plans, with buyers making deposits (typically 10-30% of purchase price) and subsequent installments tied to construction milestones. Resale transactions in the secondary market typically involve more compressed timelines, though many sellers

still structure payments over several months¹⁵.

Step 6: Survey and Site Plan (4-6 weeks, if required)

If the property hasn't been surveyed, the buyer must arrange for boundary beacons to be placed and a site plan issued by relevant authorities. Transfer of ownership cannot proceed without this documentation¹⁶.

Step 7: Lease Application and Title Transfer (6-8 weeks)

The final step involves applying for the government lease in the buyer's name. For properties in ZIPA-approved projects, this process moves more quickly as the master lease framework is already established. The buyer receives a certificate confirming their leasehold interest—the functional equivalent of a deed in freehold jurisdictions.

Transaction Costs

Beyond the purchase price itself, buyers should budget approximately 3-5% of property value for transaction costs. These break down as follows:

• Stamp Duty: 1% of property value¹⁷
• Transfer Duty: 0.5% of property value¹⁸
• Legal Fees: $3,000-$7,000 depending on complexity¹⁹
• Due Diligence and Survey Costs: $2,000-$5,000²⁰
• ZIPA Registration: Approximately $2,000 for investment certificate processing²¹
• Annual Ground Rent: Nominal amount paid to government for lease (typically under $500 annually)²²

For condominium purchases, buyers should also budget for service charges, typically running $1-2 per square meter monthly for building maintenance and shared amenities²³.

Tax Considerations

Zanzibar's tax regime remains relatively favorable compared to many established resort destinations. Rental income from property faces a 15% withholding tax for non-residents²⁴. Capital gains on property sales incur a 10% withholding rate²⁵.

These rates compare favorably to destinations like Mauritius, where higher property prices compound the impact of transaction fees. Tanzania has also signed tax treaties with 12 countries, providing additional protections against double taxation for investors from those jurisdictions²⁶.

Common Pitfalls

Property transactions in Zanzibar, while increasingly standardized, still present risks for unwary buyers. Three issues merit particular attention:

Skipping Independent Legal Counsel: Relying solely on a developer's in-house legal team creates conflicts of interest. Buyers should always retain their own Zanzibar-licensed attorney to review documentation independently.

Inadequate Due Diligence on Environmental Compliance: Zanzibar's 2015 Environmental Act designates coastal buffer zones as protected areas. Construction without proper Environmental Impact Assessment approval from the Zanzibar Environmental Management Authority (ZEMA) can be halted or even demolished²⁷. For beachfront properties, securing written setback clearance before any development is essential.

Verbal Promises Without Written Documentation: In a market where personal relationships often drive deals, buyers sometimes proceed based on verbal assurances. Zanzibar's legal system requires written contracts for enforceability. If it's not in the registered purchase agreement, it doesn't exist legally.

Financing Options

While many foreign buyers pay cash, local financing does exist. Tanzania's major banks—CRDB, NMB, KCB, and Stanbic—all offer mortgages on Zanzibar property, though nearly all loans are denominated in Tanzanian shillings²⁸.

CRDB's Jijenge Mortgage product, for example, offers up to 90% loan-to-value financing with interest rates currently ranging from 14-16% for shilling-denominated loans and 20-year terms²⁹. NMB offers similar products with 15-year maximum terms. For foreign buyers earning in dollars or euros, shilling loans create currency exposure, though some investors deliberately mismatch currencies to hedge against potential shilling appreciation.

Several banks also offer diaspora-specific mortgage products denominated in U.S. dollars, though these typically cap at lower amounts (around $300,000) and may carry slightly lower interest rates³⁰.

The Timeline Reality

From initial property identification to receiving final title documentation, buyers should expect a minimum of 4-6 months for straightforward transactions. More complex deals—particularly those involving unsurveyed land, title clarification issues, or new development approvals—can extend to 12-18 months³¹.

This timeline may seem lengthy compared to transactions in major metropolitan markets like London or Manhattan, where closings can occur in 2-4 weeks. But it reflects the thoroughness of due diligence required in an emerging market context, and the need to coordinate approvals across multiple government agencies.

For investors accustomed to frontier market property transactions, Zanzibar's process actually offers surprising transparency and legal certainty compared to many competing destinations. The key is understanding the framework, following established procedures, and working with qualified local professionals who navigate these requirements daily.

The leasehold structure, while initially foreign to buyers from freehold jurisdictions, provides secure long-term rights that function much like ownership in practice. Combined with the archipelago's tourism growth trajectory and favorable tax treatment, Zanzibar's legal framework has successfully opened the market to international capital while maintaining local control—a balance that benefits both investors and the island's long-term development.

Related Topics: Tanzania investment regulations, leasehold property rights, East African real estate law, ZIPA approval process, foreign property ownership structures

Footnotes

1. Eden Law Chambers, "Zanzibar Real Estate and Property Purchase: Comprehensive Guide," August 5, 2024. ↩
2. TanzaniaInvest, "Guide to Buying Land and Real Estate Property in Zanzibar," July 3, 2025. ↩
3. Sandbank Villas, "Owning Property in Zanzibar as a Foreigner: All You Need to Know," June 27, 2025. ↩
4. TanzaniaInvest, "Guide to Buying Land and Real Estate Property in Zanzibar." ↩
5. Eden Law Chambers, "Land Purchase in Zanzibar," December 12, 2023. ↩
6. Vela Zanzibar, "Buying Property in Zanzibar: 2025 Guide for Foreign Buyers," 2025. ↩
7. Ibid. ↩
8. Aparthotel, "Can Foreigners buy Real Estate in Zanzibar?" August 25, 2024. ↩
9. Vela Zanzibar, "Buying Property in Zanzibar: 2025 Guide for Foreign Buyers." ↩
10. Estimated based on market rates reported by Eden Law Chambers and other Zanzibar legal firms, 2024-2025. ↩
11. Vela Zanzibar, "Buying Property in Zanzibar: 2025 Guide for Foreign Buyers." ↩
12. Real Estate Zanzibar, "Who can own Land in Zanzibar?" March 12, 2025. ↩
13. Vela Zanzibar, "Zanzibar Real Estate Market 2025: Prices, Yields & Forecast," 2025. ↩
14. Aparthotel, "Can Foreigners buy Real Estate in Zanzibar?" ↩
15. Based on market practice reported by multiple Zanzibar property firms, 2024-2025. ↩
16. Eden Law Chambers, "Land Purchase in Zanzibar." ↩
17. Vela Zanzibar, "Zanzibar Real Estate Market 2025: Prices, Yields & Forecast." ↩
18. Ibid. ↩
19. Estimated based on market rates reported by Eden Law Chambers and other Zanzibar legal firms. ↩
20. Ibid. ↩
21. Based on ZIPA processing fees reported by property developers, 2024-2025. ↩
22. Sandbank Villas, "Owning Property in Zanzibar as a Foreigner: All You Need to Know." ↩
23. Vela Zanzibar, "Zanzibar Real Estate Market 2025: Prices, Yields & Forecast." ↩
24. Ibid. ↩
25. Ibid. ↩
26. Ibid. ↩
27. Vela Zanzibar, "Buying Property in Zanzibar: 2025 Guide for Foreign Buyers." ↩
28. Ibid. ↩
29. Ibid. ↩
30. Ibid. ↩
31. Based on transaction timelines reported by Zanzibar property professionals, 2024-2025. ↩

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