The Tunisian Second Home Market: Balancing Sun, Returns, and Taxation

Published on January 21, 2026 and written by Cyril Jarnias

Buying a second home in Tunisia is no longer just a dream of vacations by the sea. For a growing number of Tunisians and foreigners, it is a structured asset investment, driven by a strongly rebounding tourism sector, prices still lower than on other Mediterranean shores, and specific tax rules that must be mastered. But behind the postcard image, the second-home market rests on increasingly sophisticated economic, legal, and fiscal balances.

Demand Supported by Economic and Tourist Recovery

The Tunisian macroeconomic context remains mixed but is significantly more favorable than in the immediate aftermath of the pandemic. After a 9% GDP collapse in 2020, growth resumed: 4.7% in 2021, 2.7% in 2022, near stagnation in 2023, then 1.4% in 2024. In 2025, momentum is accelerating: in the second quarter, real GDP grew 3.2% year-on-year, the best performance since 2022. The World Bank anticipates around 2.6% growth and the IMF 2.5%, with an expected trajectory of 2.5–3.2% per year until 2028.

On the tourism front, the recovery is spectacular. After the 2020 collapse (–78.7% in arrivals) and the Covid parenthesis following the shocks of 2015, the curve has reversed. International arrivals surged by 49.1% in 2021, 72.5% in 2022, 81.3% in 2023, then another 3.5% in 2024 to reach about 9.7 million visitors, surpassing the 2019 record. In 2025, the trend remains positive: +11% arrivals in the first half, +8% in tourism revenue over the same period, and nearly 4 billion dinars already collected by mid-July.

A Rising but Still Affordable Residential Market

The first data point that interests buyers of a second home is obviously price trends. In Tunisia, the trend has clearly been upward for over a decade, but with significant fluctuations and a marked differential between mid-range and high-end segments.

Rising Prices Across the Country

Figures from specialized platforms like Properstar and the National Statistics Institute show sustained growth, but not explosive. In the third quarter of 2025, the average apartment price reached 329 dinars per square foot, a year-on-year increase of 6.82%. In real terms, adjusted for inflation, the increase is only 1.71%, highlighting the decisive role of recent inflation. Quarter-over-quarter, the increase reached just over 3%.

In the long term, the scale of the movement is clear: between 2011 and 2021, residential prices more than doubled in nominal terms (over 100%), but real growth is more modest, a little under 20% in ten years. Apartments increased cumulatively by 110% (21% in real terms), houses by 102% (16% in real terms). Between 2021 and 2023, apartments rose another 16.6% nominally (–2% in real terms), houses by 22.4% (2.8% in real terms). In other words, real estate partially protects against inflation, but without massively outperforming it.

In 2024, the national average price for apartments is around 3,345 dinars per square meter, up 6.4% year-on-year. On the rental side, rents saw an even sharper increase, +7.27% in 2024, which mechanically improves gross yields.

Marked Regional Differences

Behind these national averages lies a highly contrasting price geography, particularly important for the second-home market which concentrates on a few coastal and urban hubs.

The following table illustrates median price levels in the third quarter of 2025 in a few key cities, per square foot, for apartments and houses.

Simultaneously, data per square meter by governorate provides a more detailed picture:

For a prospective second-home buyer, the trade-off is therefore between highly sought-after areas – more expensive, but very liquid and driven by tourism – and more affordable regions, often promising in the medium term.

Key Hubs for Second Homes

In practice, the Tunisian second-home market is structured around a few major basins.

Conversely, more accessible neighborhoods like Ain Zaghouan or certain southern suburbs have significantly lower rates, around 700 to 1,500 dinars/m², while remaining connected to the capital’s economic heart. These areas attract middle-class Tunisians seeking a second home or rental investment.

Further south, Monastir offers more moderate prices, 1,800 to 2,800 dinars/m² for houses, attracting retirees and buyers seeking tranquility. Finally, Djerba displays even more contained rates for villas, between 1,400 and 2,700 dinars/m², with the particularity of a stock of traditional houses (“menzels”) frequently renovated for tourist rental projects.

At the other end of the spectrum, cities like Sfax, away from mass tourist flows, remain among the most affordable, with 1,000 to 1,500 dinars/m² for a house. They attract more of a local or diaspora clientele than purely tourist buyers.

High Housing Vacancy, but Strong Tension in Tourist Areas

Figures from the latest census (2024) may be surprising: the housing stock exceeds 4.26 million units for about 3.47 million households, meaning nearly 794,000 vacant homes and a vacancy rate of 19.3%. This apparent oversupply, however, does not prevent pressure on certain segments.

The structure of the stock partly explains this paradox. About 80% of formal housing is built by households themselves, 18% by registered private developers, and only 2% by public operators. The most common types are duplexes (nearly 49% of the stock), apartments (about 25%), traditional Arab houses (nearly 16%), and villas or villa floors (a little over 10%).

Geographically, the residential stock is concentrated in Greater Tunis and the Northeast, with over 1.2 million homes, then the center of the country (over 850,000), the central-south (over 560,000), the Northwest (about 460,000), and the South (a little over 340,000). For an investor targeting seasonal rental or vacation use, the coastal areas of the East (Sousse, Monastir, Mahdia, Nabeul) and Greater Tunis offer the best combination of tourist appeal and market depth.

A Generally Attractive Rental Yield

One of the main arguments in favor of buying a second home in Tunisia is gross profitability. Data compiled in the second quarter of 2025 indicates a national average rental yield of 5.43%, slightly up from 5.2–5.24% the previous year.

Differences by city are significant:

In Tunis, yields range between 5.77% and 8.21% depending on the neighborhood and property size, with an average above 7%. In the periphery, Ariana or Ben Arous hover around 5–6%, while Nabeul, although a sought-after coastal zone, averages less than 4%, reflecting high land valuation relative to rents.

For investors targeting seasonal rental, prospects are even more favorable. Market analyses anticipate, depending on segments, typical gross yields around 4 to 6% for luxury seafront apartments, 5 to 8% for “standard” vacation apartments, 6 to 9% for vacation villas, and up to 7 to 10% for renovated traditional houses operated as charming accommodations. Tourist commercial properties can reach 8–12%.

A Specific Tax Framework for Second Homes

Behind the appeal of yields, the question of taxation is central for any second-home owner, whether resident or non-resident.

Tax on Rental Income

In Tunisia, any person – including non-residents – is taxable on their Tunisian-source income. Rental income falls into the category of global income and is subject to the progressive personal income tax scale. For standard rentals, a flat deduction of 30% of the gross rent is allowed for expenses; the taxpayer can also choose to deduct their actual expenses if they have the necessary supporting documents.

A social solidarity contribution of 1% is added to income subject to the scale, which also concerns property income. For non-resident individuals who earn rental income from properties operated professionally (shops, offices, hotels), a withholding tax is provided, at the general rate of 15%, reduced to 5% for hotel establishments. Foreign companies receiving rental income from properties located in Tunisia are deemed to have a permanent establishment there and are taxed as such.

An important point for investors: income from renting student accommodations is tax-exempt for ten years, which may interest certain niche markets in large university cities. Furthermore, interest on deposits in foreign currency or convertible dinars is exempt from withholding tax, and dividends distributed by Tunisian companies to their partners are in principle tax-free.

Wealth Taxation: Property Tax and Real Estate Wealth Tax

Tunisia has gradually consolidated a tax system targeting real estate, distinguishing between primary residence and other properties.

A second home is subject to the property tax just like a primary residence, but several nuances should be noted. First, the housing tax, which historically applied to any occupied dwelling, was completely abolished for primary residences on January 1, 2023, but continues to apply to second homes. Municipalities can also increase this tax by up to 60% in areas facing housing pressure, which notably includes highly sought-after seaside localities.

Second, the 2014 finance law had introduced a property tax of 1.5% of the property’s value on all buildings other than the primary residence. While this rate was abandoned, the principle of enhanced taxation of second homes was maintained. For example, acquiring a second home valued over 100,000 dinars incurs a specific registration duty of 3% of its price.

Finally, a tax for household waste removal is attached to the property tax on second homes, which further slightly increases the annual holding cost.

Transfer and Capital Gains Taxation

When purchasing a second home, several duties and taxes add up. A property transfer tax, generally between 6 and 10% depending on the nature of the transaction, applies. To this is added a registration duty of 5% of the price, plus VAT, and a land registration fee of 1%, also subject to VAT. The sales contract incurs a stamp duty of 2 dinars per page. Furthermore, the buyer – whether an individual or company – must withhold 2.5% of the total price including tax, remitted to the tax authorities.

The tax rates for real estate gains depend on the holding period. If the property is resold within five years of acquisition, the rate is 15%. Beyond five years, it is reduced to 10%. For built properties or building land received by inheritance, a specific rate of 5% applies, regardless of the holding period. The taxable base corresponds to the difference between the sale price and the acquisition cost, after deduction of incidental expenses, construction or improvement work expenses, and especially an annual allowance of 10% of the acquisition cost for each year of ownership, a mechanism that progressively reduces the taxable base.

For non-residents, this withholding tax coupled with the possibility of filing a detailed declaration, and the existence of double taxation treaties with several countries (France, Canada, Germany, Belgium, Italy, Switzerland, the United States, Canada, notably), allows for optimizing the overall tax burden, subject to specialized advice.

Inheritance and Gift Taxation

For a second-home owner, property transfer is a subject to anticipate, especially when heirs are established abroad or when the arrangement involves a mixed couple. Registration duties on inheritances vary according to the family relationship: 2.5% for ascendants and descendants, 5% for brothers and sisters, 25% for uncles, aunts, nephews, nieces, and cousins, 35% for relatives beyond the fourth degree and non-relatives. These duties are calculated on the value of the transferred property.

Specific Access and Financing Rules for Foreigners

The Tunisian second-home market attracts a diverse clientele: European retirees, expatriates, Maghreb diasporas, Gulf investors, but also a growing number of digital nomads. Their common point: all are subject to a more restrictive legal framework than nationals.

Property Rights and Authorizations

Since 2005, a legislative framework expressly authorizes foreigners to acquire real estate for economic and touristic purposes, in designated zones. A foreigner can buy an apartment, villa, or commercial space, but cannot become the owner of agricultural land, which is reserved for Tunisians. Land not covered by a development plan is considered agricultural and therefore in principle inalienable to a non-Tunisian, except for exceptions linked to large-scale investment projects.

The standard procedure involves first signing a preliminary sales agreement – often accompanied by a deposit – subject to the suspensive condition of obtaining the authorizations, then the final deed once they are granted. In certain tourist or industrial zones, more favorable regimes may exist, for example global authorizations granted to developers to market lots to foreigners. Transactions exceeding 3 million dinars may benefit from accelerated processing under the investment policy.

Buyers are also required to declare the source of funds, as part of anti-money laundering logic. The transaction must be carried out via a Tunisian bank account funded by transfers from abroad, which allows, in case of resale, to repatriate the sale proceeds up to the limit of the initially transferred amounts, with supporting documentation.

Transaction Costs and Role of Professionals

According to international comparisons, Tunisia falls within a reasonable average in terms of formalization costs. The World Bank’s Doing Business report lists five major procedures for registering a property, with an average duration of 35 days and a total cost of about 6.1% of the property’s value. To these costs, for a non-resident, are added the fees of a lawyer and possibly a tax advisor.

In practice, a buyer typically bears:

– the transfer tax (about 5 to 6%, depending on the nature),

– the registration duty (often 5%),

– the land registration fees (1 to 1.5%),

– the stamp duty (percentage-based or per page),

– the notary fees (about 1 to 2%),

– agency commissions (2 to 3%),

– various banking and administrative fees.

International analyses estimate the “round-trip” cost (purchase then resale) to be around 9–15% of the price, which remains moderate compared to some Mediterranean neighbors.

To secure the transaction, the use of a notary is mandatory for the authentic deed. The assistance of a lawyer specialized in real estate law and non-resident taxation is highly recommended, especially for the structuring (direct acquisition or via a company), currency management, and tax optimization.

Access to Credit: Limited Room for Maneuver

The Tunisian mortgage market remains shallow: over 70% of housing projects are self-financed by households, and only about 4% resort to a loan to build a house. The total volume of residential real estate loans stands at about 12.93 billion dinars, or nearly 10% of GDP, a ratio still low. Furthermore, nearly 10% of these loans are non-performing.

For a foreigner, access to local credit is even more restricted. Few institutions agree to finance non-residents, and those that do often require a down payment of 40 to 50%, interest rates of 8 to 10%, and maximum terms of 10 to 15 years. In fact, the majority of foreign investors opt for a cash purchase or for installment payment plans offered by some developers (usually 2 to 3 years, with a 30 to 40% down payment).

Overall Competitive Taxation on a Mediterranean Scale

While the tax architecture may seem heavy, it is still considered advantageous compared to other competing Mediterranean markets. Several elements work in its favor.

First, gross yields are comfortable, often above 5%, which leaves room after taxes, especially given the absence of taxation on unfurnished rentals and relatively moderate rates on furnished rentals. Second, the country has no luxury taxes or specific excise duties on real estate, and VAT on new homes (7% on certain properties, 18–19% on others) is generally included in the developer’s price.

For Tunisian buyers residing abroad, the framework is even more incentive. Many exemptions from administrative fees exist, notably on registration and land registration formalities for properties acquired with foreign currency, and a reduced rate of 1% for the registration tax can be applied for purchases intended for economic activities. Fixed registration duties of 30 dinars per page are also possible. A non-taxation certificate can be issued for income exclusively from foreign sources.

A Shift in Tourism Supporting the Second-Home Segment

Tunisian tourism is no longer confined to the seasonal beach model. While the beaches of Hammamet, Sousse, Monastir, Mahdia, Djerba, or Tabarka remain pillars, the strategy is to spread demand throughout the year by developing wellness, thalassotherapy (where Tunisia has become the second largest global hub after France, with some 250,000 therapy clients per year), medical tourism, ecotourism (desert, hiking, natural parks like Ichkeul), and cultural tourism around medinas, Roman ruins, and museums (Carthage, Bardo, Kairouan, etc.).

Flagship projects confirm this repositioning. The revival of the gigantic “Tunis Sports City” project by an Emirati group, on about 250 hectares north of the capital, announces a set of luxury villas, golf courses, sports academies, hotels, and other facilities. In Gammarth, a “smart resort”-type project combines high-end apartments (S+3, S+4, triplex), coworking spaces, children’s areas, a tourist shopping center, and secured parking, a true showcase of this new hybrid model of second home between private use and rental operation.

A Promising Market, but Requiring Preparation and Guidance

For a Tunisian household as for a foreign investor, positioning oneself in the Tunisian second-home market in 2025–2026 offers an interesting opportunity/risk balance, provided one does not rely solely on the attractions of the climate and prices still lower than those of Spain, Italy, or Greece.

Several elements work in favor of the market. Prices continue to grow at a rate of 4 to 6% per year depending on segments, suggesting potential for capital appreciation, especially in established coastal zones and a few emerging hubs. With rental yields remaining above 5% on average, the “capital gain + income” combination offers an attractive prospect. Taxation, despite the rise of the property tax and the real estate wealth tax, remains overall competitive, especially since unfurnished rentals escape income tax and international tax treaties limit friction for non-residents.

But challenges persist. Access to credit is difficult, particularly for Tunisian middle classes and for non-resident foreigners, while interest rates remain high and banks are more cautious about long maturities. Construction costs are under pressure due to rising material prices and the scarcity of well-located land reserves, making new developments more expensive. The sector also suffers from a lack of truly affordable housing, with most new developments targeting mid- and high-end segments.

Macro-economic and political risks should not be underestimated: high public debt, dependence on external financing, delicate negotiations with the IMF, recurrent social tensions, and a political context marked by a strengthening of presidential power and convictions of opponents that raise questions for some institutional investors. Caution is therefore still advised for investors most sensitive to institutional stability.

Finally, the choice of the type of second home will depend closely on the buyer’s profile. A European retiree may prefer a villa in Hammamet or La Marsa, well-connected, in a secure neighborhood, even if it means accepting a modest yield but high comfort of use. A rental investor will aim more for an S+2 apartment in a high-demand sector, close to beaches or universities, to capture sustained demand for annual or seasonal rental. A member of the Tunisian diaspora may, for its part, choose a property in their region of origin, with a logic of family use and inheritance.

In any case, the Tunisian second-home market today rests on solid fundamentals: an abundant but qualitatively changing housing stock, structurally strong tourist demand, growing urbanization, a stabilized legal framework, and still attractive taxation. The key to fully benefiting from it is to combine a good reading of local dynamics – city by city, neighborhood by neighborhood – with a fine understanding of tax and regulatory rules. It is at this price that the dream of a house in the sun can transform into a sustainably profitable investment.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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