Zanzibar is stepping into the spotlight. Once a quiet island escape, it’s now drawing a new wave of investors seeking both serenity and strong returns. Tourism arrivals have surged to record highs, while new direct flights and pro-investment laws are transforming access and ownership. Yet the island still feels untouched - a rare mix of authenticity and opportunity.

In this article, we explore why Zanzibar is emerging as one of the Indian Ocean’s most compelling real estate markets - from ownership laws and yields to the landmark developments shaping its future.

The Momentum Behind Zanzibar’s Rise

Zanzibar’s growth story is backed by hard data. According to the Office of the Chief Government Statistician, international arrivals have more than doubled since 2019, with 2025 marking the island’s strongest tourism year on record.

Visitor stays are also lengthening, driven by the island’s elevated hospitality scene and the entry of global brands like Four Seasons, Anantara, and Le Méridien, all confirming projects through their official press channels.

The Zanzibar Airports Authority reports a sharp rise in global connectivity. By 2026, 38 airlines will operate direct flights to the island (up from 28 in 2020) linking Zanzibar with key hubs such as Dubai, Doha, Rome, Frankfurt, and Johannesburg. This expansion is making the island more accessible to high-net-worth travellers and investors worldwide.

At the policy level, the local government continues to streamline investor access. The 2023 Zanzibar Investment Act clarified ownership rights, residency-by-investment eligibility, and guarantees on the repatriation of profits. Together, these reforms give international buyers the transparency and confidence they need to consider the island a serious long-term investment destination.

Zanzibar now sits at an inflection point, where lifestyle appeal meets legal maturity. And for investors, that combination opens a window that markets like Mauritius and the Seychelles have long since priced in.

Ownership and Legal Security for Foreign Investors

Zanzibar makes it relatively simple for foreigners to own property. While all land officially belongs to the government, buyers can secure long-term leases under the Land Tenure Act - usually for 33 years, renewable for up to 99 years.

If you’re buying a villa or apartment within a development, the Condominium Act allows you to hold your unit in your own name, with full rights to sell, rent, or pass it on.

Investors can register their purchase through the Zanzibar Investment Promotion Authority (ZIPA). The process is faster and can grant residence permits to qualifying buyers. It also protects your right to move profits or sale proceeds abroad under the Bank of Tanzania’s Foreign Exchange Regulations.

Taxes are simple and predictable. The Zanzibar Revenue Authority charges a 1% stamp duty on property transfers and a 1.5% fee for title registration under the condominium system. When selling, capital gains tax is between 10%-20% on the profit.

Together, these clear laws give foreign investors peace of mind - legal ownership, transparent costs, and the freedom to manage their money securely.

Investment Returns and Yield Potential

Zanzibar’s property market offers investors something that’s increasingly rare: strong yield potential underpinned by genuine lifestyle demand. Unlike purely speculative markets, the island’s returns are driven by a thriving tourism economy and year-round rental appetite.

According to the data from the OCGS, hotel occupancy averages around 60–65%, with luxury resorts regularly outperforming that benchmark. Seasonal peaks between June and October can push occupancy above 75%, while December to March brings a steady influx of European and Middle Eastern visitors escaping winter.

Average Daily Rates (ADR) for premium villas range between US$600–850 depending on location, quality, and proximity to resort facilities. When paired with responsible cost management and participation in a professional rental program, these figures can translate into gross yields of 8–12%, even after factoring in management and operational expenses.

This is where Sandbank Villas provides a useful benchmark. Each two-bedroom Hilltop Oceanview Villa is professionally managed within the five-star ZUBEA Resort ecosystem, with owners receiving 60% of net rental revenue after fees. Developer projections, based on an ADR of US$815 and occupancy between 50–70%, suggest an annual return between 11% and 15%, depending on usage and market conditions .

While every investor should apply conservative assumptions, these figures highlight what’s possible when location, design, and management align. With luxury demand rising and high-end supply still limited, Zanzibar’s top-tier villas stand out as a rare combination of emotional appeal and measurable performance.

Zanzibar’s Key Investment Locations

Zanzibar’s coastline may stretch just 85 kilometres from north to south, but the island offers distinct micro-markets, each with its own appeal for investors.

North (Nungwi & Kendwa)

This is Zanzibar’s most established luxury corridor. Known for its powder-white beaches and calm, swimmable waters, Nungwi has become a magnet for boutique resorts and premium villas. Demand here is year-round, supported by mature infrastructure and high-end hospitality brands. For investors, it’s the most liquid market with proven rental performance.

East Coast (Matemwe, Pongwe & Kiwengwa)

The east is emerging fast. With new luxury projects, including the upcoming Four Seasons Zanzibar, this region combines privacy with postcard-perfect sandbanks and reef-protected lagoons. Prices per square metre remain below the north, offering potential for capital growth as infrastructure catches up.

South-East (Paje & Jambiani)

Paje is Zanzibar’s bohemian heart. Once a backpacker haven, it’s now a hotspot for digital nomads and kitesurfers. The market skews toward mid-luxury, with strong occupancy driven by long-stay travellers and a creative crowd seeking beachfront authenticity.

South & West (Kizimkazi & Stone Town Environs)

Quieter and less developed, the south coast appeals to buyers looking for serenity and long-term value. Kizimkazi is attracting wellness resorts and eco-retreats, while proximity to Stone Town and the airport makes the west ideal for short-term holiday lets.

Across these regions, prices range from US$2,500 to US$4,500 per square metre for luxury villas, depending on view, access, and brand affiliation. The north commands a premium; the east offers growth potential; and the south remains the frontier for visionary investors.

How Zanzibar Compares to Other Island Markets

Zanzibar offers a middle ground between safety and potential. It’s more affordable than established markets like Mauritius or Dubai but far more accessible than places with strict rules like the Seychelles. For investors, that means better value today and space for growth tomorrow.

Location	Can foreigners own property?	How easy is it to move money in and out?	Stage of development	What this means for investors
Zanzibar	Yes – through long leases (up to 99 years) or condos approved by ZIPA.	Simple – profits can be sent abroad under Bank of Tanzania rules.	Growing fast – luxury resorts and tourism numbers are rising.	Still early in its growth story, so there’s room for prices and rental income to rise.
Mauritius	Yes – full ownership in certain government-approved developments.	Very easy – clear banking system and foreign buyer programs.	Well established – long history of foreign buyers.	Safe and stable, but property prices are higher and returns smaller.
Seychelles	Yes – but government approval is required, and extra taxes apply.	Fairly easy, though the process takes longer.	Exclusive – small market with limited land.	Ideal for lifestyle buyers, but costly for investors.
Thailand	Yes – foreigners can buy condos (up to 49% of a building); land only through long leases.	Easy, but some paperwork needed for foreign transfers.	Mature – plenty of choice and competition.	Proven market, though rental returns can be modest.
Dubai	Yes – foreigners can buy freehold property in designated areas.	Very easy – open banking and international transfers.	Highly developed – global property hub.	Secure and quick to resell, but yields are lower due to high prices.

Spotlight: Sandbank Villas — Modern Living Meets Smart Investment

Set on Zanzibar’s northern coast, Sandbank Villas brings together design, lifestyle, and income potential in one address. Each villa is part of the new ZUBEA five-star resort, giving owners access to beach clubs, restaurants, wellness spaces, and full management - all just steps from the water.

The villas were designed by Rob Steul, the architect behind London’s Four Seasons Ten Trinity Square, with interiors by Leonardo Biagioni. The result is a collection of homes that feel both global and rooted in Zanzibar - light-filled spaces framed by hand-carved details, natural textures, and ocean views.

Prices start from around US$355,000, placing Sandbank Villas comfortably within the $300k–$1M range that many lifestyle investors target. What sets it apart is the rental pool program, managed by Hard Launch Hospitality, which allows owners to earn income when they’re not in residence. Based on a projected ADR (average nightly rate) of US$815 and occupancy between 50–70%, returns are forecast between 11% and 15% per year after management fees.

For investors, Sandbank Villas shows what modern Zanzibar investment looks like: professionally managed, architecturally ambitious, and built to deliver both lifestyle and long-term value.

Risks, Regulations, and the Long-Term Outlook

Like any emerging market, Zanzibar comes with considerations that investors should understand, but the key is that most risks are known and manageable.

Legal and ownership clarity

All land in Zanzibar belongs to the government, but buyers hold long-term leases or condominium titles. Renewals are routine and handled through the Zanzibar Investment Promotion Authority..

Environmental regulations

The Zanzibar Environmental Management Authority (ZEMA) oversees coastal construction. Projects like Sandbank Villas go through environmental screening to ensure sustainable building practices and responsible shoreline protection, a process that helps preserve long-term property value.

Currency and liquidity

Zanzibar’s real estate market operates in US dollars, but transactions are regulated by the Bank of Tanzania’s Foreign Exchange Regulations, which guarantee legal repatriation of profits. While resale liquidity is still developing, investor confidence is rising as more high-quality, internationally managed projects enter the market.

The long view

With rising tourism, ongoing infrastructure upgrades, and stable governance, Zanzibar’s outlook remains strong. The island is early in its development curve, which means that investors who enter now are likely to benefit most from its future growth.

Invest Where Beauty and Value Align

Zanzibar is no longer an insider secret. It’s an island on the rise, one that pairs natural beauty with a clear legal framework and a booming tourism economy. For investors, it offers something rare: the chance to enter early, at accessible prices, in a market that’s growing fast but still feels authentic.

Ready to invest in Zanzibar’s rising real estate market? Discover more at sandbankvillas.com

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