How to start a real estate business in Tanzania?

You need to follow three steps to start a real estate business in Tanzania. First register with BRELA, then register with TRA then apply business license from LGA.

SUMMARY: To start a real estate business in Tanzania you need to follow three steps. First you need to register the company with Business Registrations and Licensing Agency (BRELA). Second you need to register the business with Tanzania Revenue Authority (TRA). Third you need to apply for business license from Local Government Authority (LGA).

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Overview of Real Estate Sector in Tanzania

The real estate market refers to the transaction of properties, including residential properties (such as houses and apartments) and commercial properties, such as office buildings and industrial properties. Apart from property sales, this market includes leases and the value of real estate.

The value of Real Estate market is projected to reach US$620.20bn in 2023.
Residential Real Estate dominates the market with a projected market volume of US$562.40bn in 2023.
The value is expected to show an annual growth rate (CAGR 2023-2028) of 4.81%, resulting in a market volume of US$784.40bn by 2028.

Contributions to GDP and Growth Trends

Tanzania’s real estate sector made a substantial contribution of 3.1% to the country’s real GDP, reaching USD 1.5 billion in 2019, marking a 25% increase from USD 1.2 billion in 2015.

Residential Housing Market Dynamics

Dominance of Individual Home-Builders

The housing landscape in Tanzania is characterized by a dominance of individual home-builders, constituting over 70% of the total housing supply.

Public Sector Involvement

The remaining housing supply is provided by the public sector through entities such as local governments, the National Housing Corporation (NHC), the Tanzania Building Agency (TBA), the Watumishi Housing Company (WHC), and pension funds like the National Social Security Fund (NSSF), alongside private developers.

Demand and Deficit

Tanzania faces a housing demand estimated at 200,000 units annually, contributing to an existing housing deficit of 3,000,000 units.

Urban-Rural Disparities

In 2018, Tanzania had 12.3 million households, with 67% residing in rural areas and 33% in urban areas. The urban housing market, primarily led by Dar es Salaam, witnesses a significant rental landscape.

Dar es Salaam: A Prime Urban Housing Hub

Dar es Salaam, accounting for 51% of households engaged in renting, features diverse residential segments, including high-end properties in Oyster Bay and the Msasani Peninsula.

Market Trends in Dar es Salaam

Prime residential rents in Dar es Salaam experienced a noteworthy 72% decline over the past five years, dropping from USD 5,000 per month in 2015 to approximately USD 2,900 in 2019 for a three-bedroom apartment.

Price Spectrum

Housing prices in Dar es Salaam range widely, from USD 300,000 to USD 500,000 for prime 3-bedroom properties to starting at USD 50,000 for other areas.

Emerging Markets and Initiatives

Dodoma’s Rise as a Residential Market

Dodoma, Tanzania’s capital, is emerging as a residential property market due to the government’s decision to relocate ministries and institutions from Dar es Salaam.

Low and Middle-Income Housing Initiatives

The NHC launched the Iyumbu Satellite Centre in 2016, offering 300 three-bedroom stand-alone houses at prices ranging from USD 25,109 to USD 36,551, catering to low and middle-income households.

Tanzania’s Office, Retail, and Industrial Real Estate Markets

Office Market Dynamics in Dar es Salaam

Dar es Salaam remains the central focus of office market activity in Tanzania. However, office rents have witnessed a decline from USD 25 per sqm per month in 2015 to USD 12 in 2019, driven by oversupply and the government’s relocation decision.

Formal and Informal Dynamics in Retail

Formal retail activity in Tanzania is centered in Dar es Salaam, with small retail centers in residential areas. Despite premium malls, informal retail, known as “Wamachinga,” constitutes 80% of the market.

Industrial Sector: Demands and Challenges

Increased investment and trading activities in Dar es Salaam have led to higher demand for storage space in the prime industrial area along Nyerere Road. However, prime industrial rents have experienced a 50% decline from USD 5 to USD 3.5 due to oversupply and rising vacancies.

Anticipated Growth in Industrial Demand

The industrial sector is poised for growth, driven by recent discoveries of natural gas offshore and numerous planned infrastructure projects.

How to Register Real Estate Business in Tanzania?

Step 1: Register the company with BRELA

Prepare memarts, form 14b and get them notarised. Ensure that you follow ISIC in the objects of the company.
Fill in the application online in the BRELA online registration system (ORS). How to create account in BRELA ORS? How to register company in Tanzania with BRELA ORS? Click here to read a full article on that.
After completing the form, download consolidated form, integrity pledge. Sign and scan them and upload the two forms plus the memarts and form 14b.
Proceed to payments, effect the payment and wait for BRELA to process your application.
If everything was well prepared and properly filled, you will not get any comment from BRELA instead you will get notification that the company has been registered and you can log in to down the certificate of incorporation.

The requirements for BRELA registration are:

Details of the company (name, phone, email, address, objects, share capital, directors, secretary, shareholders.)
Details of the directors and shareholders (local shareholders need NIDA, TIN, phone, email, address and shares; foreign shareholders need passport, phone, email, address and shares.)
The documents listed above (memarts, 14b, integrity, consolidated form, passport copies of foreigners)

It takes around 5 days from the date of payment of the control number to the issuance of certificate of incorporation.

Step 2: Register the company with TRA

Afte getting the certificate of incorporation from BRELA, you need to register the company with TRA for Taxpayer Identification Number (TIN) and apply for Tax Clearance Certificate.

You need copy of memarts, copy of certificate of incorporation and BRELA official search report.
You need lease agreement as proof that you have a premise for the business.
You need introduction letter from Mwenyekiti of the local government authority (LGA)
TIN copies, ID copies and a photo of one of the directors in the Mwenyekiti letter.

If the network is working well, most of the time they don’t, you will get both TIN and Tax Clearance Certificate on the same day.

Step 3: Apply for business license from LGA

There are four different types of real estate business licenses in Tanzania.

The first one is just real estate and is charged Tshs 600,000/= for local and $2000 for foreigner.
The second is property management and is charged Tshs 500,000/= for local and $3000 for foreigner.
The third is estate agency and is charged Tshs 400,000/= for local and $1000 for foreigner.
The fourth is property development. and is charged Tshs 400,000/= for local and $2000 for foreigner.

Click here to open an article that details on how to apply for business license in Tanzania.

Published by Kessy Juma

Kessy Juma

Kessy Juma is the founder of Miamia Trading Company (miamiatz). He is a Techpreneur with roots in accountancy. He believes that any business is good as long it caters the right market using the right strategy.

miamia miamia miamia miamia

Published by Kessy Juma

Kessy Juma Kessy Juma is the founder of Miamia Trading Company (miamiatz). He is a Techpreneur with roots in accountancy. He believes that any business is good as long it caters the right market using the right strategy.

miamia miamia miamia miamia
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