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Tanzania's 99-year leasehold system is the only way foreigners can legally access land in the country.
This system requires working through government-approved entities and comes with specific costs, obligations, and restrictions that can significantly impact your investment returns and long-term property security.
If you want to go deeper, you can check our pack of documents related to the real estate market in Tanzania, based on reliable facts and data, not opinions or rumors.
Tanzania's 99-year leasehold system grants long-term land use rights to foreigners through government-approved companies, with total acquisition costs around 2-3% of property value plus a minimum USD 500,000 investment requirement.
The system includes annual ground rent, development obligations, and government oversight that can affect property security and transferability.
| Aspect | Details | Cost/Requirement |
|---|---|---|
| Ownership Structure | Leasehold only - government retains ownership | Must use local company/TIC approval |
| Initial Costs | Government fees, legal costs, registration | 2-3% of property value + USD 500,000 minimum |
| Annual Obligations | Ground rent payments | TSh 50,000-500,000 for residential |
| Development Requirements | Must develop within 2-3 years | Risk of forfeiture if not met |
| Transfer Rights | Can sell/transfer with approval | Subject to government/TIC conditions |
| End of Term | Land reverts to state after 99 years | Renewal possible but not guaranteed |
| Banking/Collateral | Accepted by Tanzanian banks | Only for registered local companies |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What exactly does a 99-year lease in Tanzania legally mean compared to freehold ownership?
A 99-year lease in Tanzania grants you the right to use, develop, and occupy land for a fixed period of 99 years, but the government retains ultimate ownership of the land.
This is fundamentally different from freehold ownership, which is only available to Tanzanian citizens and provides perpetual ownership rights with no time limit. Under freehold, the owner controls both the land and any improvements indefinitely.
With a 99-year lease, you essentially become a long-term tenant of the government with extensive rights to use the property. You can build on it, rent it out, sell your leasehold rights, and pass it to heirs, but at the end of 99 years, the land automatically reverts to the state unless you successfully negotiate a renewal.
The Tanzanian government also offers shorter lease terms of 33 and 66 years, but the 99-year option is most common for foreign investors since it provides the longest security period for major property investments.
As of September 2025, this leasehold system is the only legal way for foreigners to access land rights in Tanzania's residential and commercial property markets.
How much does it typically cost to acquire a 99-year lease, including government fees, legal costs, and registration?
The total cost to acquire a 99-year lease in Tanzania typically ranges from 2-3% of the property value, plus you must meet the minimum USD 500,000 investment requirement set by the Tanzania Investment Centre (TIC).
Government fees include stamp duty at 1% of the property value and registration fees at 0.4% of the property value, totaling 1.4% in official charges. The TIC also charges specific facilitation fees, with derivative right registration costing TSh 135,000 as of September 2025.
Legal and professional fees add another 1-2% of the property value, plus survey charges ranging from TSh 200,000 to TSh 500,000 depending on the property size and location. You'll need qualified legal representation to navigate the TIC approval process and ensure proper registration.
The USD 500,000 minimum investment threshold applies to the total project value, not just the land cost. This means if you're buying a TSh 800 million property (approximately USD 320,000), you'll need to demonstrate additional investment in development or business activities to reach the minimum threshold.
Annual ground rent payments start immediately after acquisition, typically ranging from TSh 50,000 to TSh 500,000 per year for residential properties in urban areas.
Can foreigners directly hold a 99-year lease in their own name, or do they need to set up a local company or partnership?
Foreigners cannot directly hold a 99-year lease in their personal name in Tanzania.
You must acquire leasehold rights through an approved local company or partnership structure, typically registered specifically for investment purposes through the Tanzania Investment Centre (TIC). This requirement applies to all foreign individuals and entities seeking land access in Tanzania.
The most common approach is establishing a Tanzanian company with the foreign investor as a shareholder or director, then having this company hold the leasehold rights. The TIC oversees this process and issues derivative rights to the approved company structure.
Direct citizen-to-foreigner land sales are explicitly prohibited under Tanzanian law. All transactions must go through the proper government channels and approved entity structures to be legally valid.
It's something we develop in our Tanzania property pack.
What are the annual ground rent payments or renewal fees attached to a 99-year lease, and how often do they increase?
Annual ground rent for 99-year leases in Tanzania varies by property type and location, with residential properties in urban areas typically paying between TSh 50,000 and TSh 500,000 per year as of September 2025.
Commercial and agricultural leases generally carry higher annual ground rent payments, reflecting their income-generating potential and different land use classifications. The exact amount is determined by government assessment based on property location, size, and intended use.
Ground rent increases are not on a fixed schedule but occur through periodic government reviews of land valuation and rental rates. These reviews can happen every few years, and increases typically align with inflation rates and local economic conditions.
Payment of annual ground rent is mandatory and failure to pay can result in lease forfeiture. The government maintains strict records of payment compliance as part of its oversight of leasehold properties.
Some leases include provisions for rent escalation tied to specific economic indicators, while others require renegotiation at predetermined intervals during the 99-year term.
Does the government have the power to revoke or reduce the term of a lease, and under what specific conditions could that happen?
Yes, the Tanzanian government has the legal authority to revoke or reduce the term of a 99-year lease under several specific conditions.
| Revocation Reason | Description | Risk Level |
|---|---|---|
| Non-payment of fees | Failure to pay annual ground rent or other required fees | High |
| Development non-compliance | Not meeting mandatory development deadlines (usually 2-3 years) | High |
| Breach of lease terms | Violating specific conditions set at time of lease grant | Medium |
| Public interest projects | Government infrastructure development requiring land | Low |
| Illegal land use | Using land for purposes not permitted under lease agreement | Medium |
| TIC compliance failure | Not meeting ongoing investment or reporting requirements | Medium |
| Security concerns | Activities deemed harmful to national security or interests | Low |
The most common reasons for lease revocation involve failing to meet development requirements or non-payment of annual obligations. Most leases include specific deadlines for beginning and completing development projects.
When land is needed for overriding public interest, such as major infrastructure projects, the government can acquire leasehold properties through compulsory acquisition, though compensation is typically provided.
It's something we develop in our Tanzania property pack.
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What restrictions are there on selling, sub-leasing, or transferring a 99-year lease to another buyer?
Tanzania's 99-year leases are transferable, sub-leasable, and sellable, but these transactions require government approval and must comply with TIC conditions and development covenants.
When selling your leasehold rights, the buyer assumes the remaining lease period and all associated obligations, including development requirements and annual ground rent payments. The transaction must be registered with the appropriate land authorities to be legally valid.
Sub-leasing is permitted but requires adherence to the original investment and land-use terms set when the lease was granted. Any sub-lease arrangement cannot exceed the remaining term of the original 99-year lease.
TIC approval may be required for transfers involving foreign entities, and the new holder must meet the same investment thresholds and compliance requirements as the original lessee. This process can add several months to transaction timelines.
Transfer restrictions may also apply based on the specific development covenants attached to individual leases, particularly for agricultural or commercial properties with ongoing use requirements.
Are there land use requirements, such as developing the land within a set timeframe, that could risk losing the lease if not met?
Most 99-year leases in Tanzania include mandatory development requirements with specific deadlines, typically requiring substantial development within 2-3 years of lease grant.
Failure to meet these development deadlines can result in lease forfeiture, making this one of the highest risks for foreign property investors. The requirements vary by property type and location but generally mandate beginning construction and showing meaningful progress toward project completion.
Commercial and agricultural leases typically have stricter development and use reporting requirements through the TIC, with annual compliance reviews to ensure ongoing adherence to investment commitments. Residential leases may have more flexible requirements but still include basic development expectations.
Some leases specify minimum investment amounts that must be spent on development within the initial years, while others focus on percentage completion milestones for construction projects.
Extensions for development deadlines are possible in some cases but require formal application and approval from the relevant authorities, and are not guaranteed to be granted.
How secure are inheritance rights—can a 99-year lease be passed on to heirs or assigned in a will without government interference?
Tanzania's 99-year leasehold rights are inheritable and can be passed to heirs through wills, but the transfer requires government recognition and proper registration to be legally effective.
Heirs who inherit leasehold property automatically assume all obligations under the original lease terms, including annual ground rent payments, development requirements, and compliance with TIC conditions if applicable.
The inheritance process involves registering the transfer with the appropriate land authorities and updating ownership records to reflect the new leaseholder. This registration process is generally straightforward when proper documentation exists.
No automatic government interference occurs in inheritance transfers, but disputes over inheritance or questions about heir eligibility could require resolution through Tanzanian courts or administrative processes.
Foreign heirs who inherit through a Tanzanian company structure can maintain the lease, but individual foreign heirs may need to establish proper legal entities to hold the inheritance in compliance with foreign ownership restrictions.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Tanzania versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What role does the Tanzania Investment Centre (TIC) play in approving or monitoring leases held by foreigners or investors?
The Tanzania Investment Centre (TIC) serves as the central government agency for approving, monitoring, and regulating all foreign-held leases and property investments in Tanzania.
TIC sets the minimum investment thresholds (currently USD 500,000 as of September 2025), reviews investment proposals, and issues the necessary approvals for foreigners to acquire leasehold rights through approved local companies or partnerships.
The agency conducts annual compliance reviews to ensure foreign investors meet their ongoing investment commitments, development timelines, and reporting requirements. TIC has the authority to revoke approvals or recommend lease termination for non-compliance.
TIC also arbitrates disputes involving changes in company ownership, partnership structures, or major modifications to investment plans that affect the original approval terms. Any significant changes to foreign investment arrangements require TIC notification and often formal approval.
For ongoing lease holders, TIC monitors compliance with development deadlines, investment amounts, and business operation requirements tied to the original investment approval.
Are there different rules for agricultural, residential, and commercial leases, and how do those rules impact long-term value?
Tanzania applies different lease rules and requirements based on property type, with agricultural, residential, and commercial leases each having distinct terms, reporting obligations, and rent structures.
- Agricultural leases require EPZA (Export Processing Zones Authority) or TIC approval, include strict land use requirements, and mandate detailed annual reporting on agricultural activities and production levels.
- Residential leases have simpler approval processes, lower annual ground rent (TSh 50,000-500,000), and lighter ongoing use requirements, making them more accessible for individual foreign investors.
- Commercial leases carry higher annual rent payments, stricter expansion and development deadlines, and require stringent TIC oversight with regular business performance reporting.
- Mixed-use properties must comply with the most restrictive requirements applicable to any component of the development.
- Tourism-related leases often include specific requirements related to tourism industry development and employment of local staff.
These different rules significantly impact long-term property values, with residential leases generally offering the most security and lowest ongoing compliance costs. Commercial leases may provide higher rental yields but come with greater regulatory risk and compliance expenses.
Agricultural leases can be subject to additional restrictions related to food security policies and export regulations, potentially limiting resale options to qualified agricultural investors.
How do banks in Tanzania treat 99-year leasehold properties when it comes to mortgages or collateral for loans?
Tanzanian banks accept 99-year leasehold properties as collateral for mortgages and loans, but lending is typically available only to registered local companies, not individual foreign borrowers.
Bank valuations for leasehold properties consider the remaining lease term, with properties having longer remaining terms receiving higher loan-to-value ratios. Banks typically lend up to 70-80% of property value for well-located leasehold properties with substantial remaining terms.
Loan eligibility depends heavily on TIC registration status and compliance history, with banks requiring current compliance certificates and evidence of up-to-date ground rent payments before approving financing.
Interest rates for loans secured by leasehold property are generally comparable to those for freehold properties, but banks may require additional documentation related to lease terms and ongoing obligations.
It's something we develop in our Tanzania property pack.
At the end of the 99 years, what exactly happens—does the land revert automatically to the state, and is there any renewal process available?
At the end of the 99-year term, the land automatically reverts to the Tanzanian state unless the leaseholder successfully negotiates and receives approval for lease renewal.
The renewal process involves submitting a formal application for lease extension to the relevant land authorities or TIC, typically beginning several years before the original lease expires. This process includes review of the leaseholder's compliance history, current land use, and prevailing government land policies.
Renewal is not guaranteed and depends on several factors including the leaseholder's compliance record, current government land use priorities, development contribution to local economy, and payment of all outstanding obligations throughout the lease term.
When renewal is approved, the new lease terms, duration, and rental rates are subject to renegotiation based on current market conditions and government policies at the time of renewal. The renewal may be for another 99 years or a shorter term.
If renewal is denied or not pursued, any buildings or improvements on the land may revert to the state along with the land, though compensation arrangements vary depending on the specific circumstances and remaining asset value.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Tanzania's 99-year leasehold system provides foreigners with long-term property access but requires careful navigation of government approvals, ongoing compliance obligations, and development requirements.
Success with leasehold property investment depends on understanding the total cost structure, maintaining compliance with TIC requirements, and planning for the eventual renewal process well before the lease term expires.
Sources
- NIWAS Housing Finance - Freehold vs Leasehold Property
- TheAfricanVestor - Foreigners Own Land Tanzania
- ALN Tanzania - Land Acquisition for Foreign Investment
- Tanzania Investment Centre - Property Rights
- Mondaq - Land Ownership in East Africa
- EDI - Tanzania Land Rights
- TheAfricanVestor - Title Deed Tanzania
- Alin Law Care - Land Acquisition Procedures
- Clyde & Co - Land Acquisition in Tanzania
- LinkedIn - Tanzania Land Law for Foreign Investors