THE SENEGALESE REAL ESTATE BOOM
The capital of SenegalDakar is in the midst of a real estate boom. Luxury villas, hotels and shopping malls have sprung up across the country in recent years, particularly on the Dakar coast.
From 1994 to the present day, property prices in Dakar have jumped by around 256%, according to Senegal's National Statistics Agency. Senegal's real estate market is a favored investment for local elites, as it is seen as a means of security in West Africa. What's more, Senegal is a peninsula, which is widely recognized around the world as a country where space is at a premium, and prices tend to rise.
In recent years, Senegal's capital Dakar has continued to experience increases in property prices. The main driver of these price rises is strong demographic growth. The growing population of Dakar is mainly supplied by migrants from rural Senegal and neighboring countries. In 2016, Senegal was home to around 15.41 million people.
from countries like Nigeria have increasingly realized that Dakar, the capital of Senegal, is located on a peninsula that is the most westerly point in Africa, presenting a reliable market for second homes.
In addition, widespread money laundering in Senegal is also the conduct of the real estate market.
Foreign investment in Senegalese real estate
Foreigners can own real estate in Senegal. It can be difficult for them to raise money in Senegal through real estate. Officially theinvestment stipulates the free transfer of capital. But in reality, transfers to countries other than members of the West African Economic and Monetary Union are still subject to numerous requirements, controls and authorizations. In addition, the opening of a foreign exchange account requires the approval of the Central bank and the government.
Real estate yields in Senegal
Rental yields are good in Senegal, and even higher in Dakar and on the coast. As is usual in urban markets, smaller properties tend to yield a little more, while larger properties yield less.
The cost of seaside property are almost the same, but the achievable rentals are higher. A 300 sq.m. beachfront property might cost around $320000, but could be rented for $2800 per month, giving a yield of 10.5%.
Income tax is moderate in Senegal, but can be avoided
- Rental income: net income rental in Senegal is subject to tax at 20%. However, income tax is only selectively applied, and tax officials are open to persuasion. Of which it's best to declare a portion perhaps 30% of the rental received. Never declare too much, it draws attention to you.
- Capital gains: capital gains realized from the sale of real estate are taxed at a flat rate of 30%.
- Estate: Inheritance tax is levied at different rates, depending on the relationship between the deceased and the heirs. Husbands, wives and lineal descendants are liable to pay 3% tax on their inheritance of real estate in Senegal.
- Residents: residents are subject to global income tax.