Investors Guide to Tunisia

The Purchasing Process

As permission for foreign nationals to purchase property in Tunisia is rather new, certain policies are in place and strong restrictions are held against purchasing agricultural land. The procedure surrounding the ‘Governor’s Agreement’ is considered a mere formality, as the restrictions begin to relax.

While this approval process can appear un-necessary to some foreign investors, others see it as an ideal system to ensure the security of real estate investment purchases. The process of the Governor’s Agreement requires thorough checks on the property, ensuring it complies with legal building regulations.

Often an initial deposit of around 10% of the purchase price will be required, although the amount many vary between real estate agents and developers. A Private Purchase Contract will be drawn up, outlining the legal obligations of both parties during the purchasing process.

All contracts in Tunisia are required to be submitted to the notary office to ensure their legal compliances. While these processes may be phased out in time, the procedure of keeping track of real estate sales in the country is considered beneficial against fraudulent practices.

Documentation required by foreign buyers to be submitted for the Governor’s Agreement process include a certificate from the developer outlining the sale procedure, a Ground Certificate, passport copy and proof of funds transfer for the purchase.

Once the documentation is received, the notary is required to make inspection visits to ensure the property is as specified from the details supplied to the buyer, and that it is actually undergoing construction.

Buyers should ensure that the Private Purchase Contract outlines a clause stipulating that all finances will be returned to the buyer, should the Governor’s Agreement authorisation be refused.

Once this process is completed, the remaining payments and buying process will continue as outlined in the Private Purchase Contract. This will include any required staged payments during the construction process, or details of the remainder payment being required upon completion.

Fees & Taxes

The total associated buying costs in Tunisia amount to less than 10% of the purchasing price, with all of the fees required to be paid by the buyer. The real estate agents fees are also paid exclusively by the buyer, rather than the seller as in many other countries.

• Transfer tax is 5%
• Registration fee is 1%
• Contract fee is 0.1%
• Miscellaneous costs including notary fees, title deeds, property certificates are 0.01%
• Real estate agents fees are 3%
• Total purchasing costs are 9.11%

Taxes in Tunisia are based on progressive rates, depending on the size of the property and monthly income. Some small initial subsidiaries are available on taxable income rates, while deductions from the gross rental income of 30% are standard to cover the income generating expenses. Non-resident homeowners are taxed only on their Tunisian sourced income, and married couples are taxed together.

• Income tax is between 1% and 5%
• Tax on rental income is between 8.3% and 17.7%
• Taxable income rates are between 15% and 35%
• Annual real estate tax is charged at 2% of the properties m² value

Capital gains taxes in Tunisia are calculated through a progressive rate, involving deducting the acquisition costs and incidental expenses, improvements and buying costs. Then a further deduction of 10% of the acquisition costs is made for each year that the property is owned by the current title holder.

Financing the Property

As the real estate market in Tunisia has only been open to foreigners since 2006, mortgages are currently only available to Tunisian nationals. Many investors to the market consider that the low entry level prices and low associated buying costs enable an ease of purchasing, not warranting financial assistance.

Buyers and investors considering the Tunisian property market with financial assistance do have some alternative options. Arranging personal loans in home countries is a popular option, along with releasing capital or re-mortgaging a current home.

It is expected that a mortgage market will open to foreigners in Tunisia in the coming years. The growth of the real estate market will inevitably push up the prices, creating a need for internal financial assistance options.

At present it is possible for Tunisian nationals to arrange mortgages and financing with local banks. Generally the interest rates for these clients is around 6%, with a maximum loan amount of approximately four time the client’s annual wage. These clients are also required to place a deposit of approximately 20% of the property price.

The current mortgage market for the local community assists with general predictions of what the mortgage market will be like to foreigners once it becomes available.

More about overseas property finance

More about investing in Tunisia:
Features & Benefits
Past, Present & Future
Reasons to Invest in Tunisia
Visitors Guide to Tunisia
Investors Guide to Tunisia
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