The dream of owning a slice of paradise in Mauritius—a luxury villa nestled in a resort-style estate, a beachfront apartment with endless Indian Ocean views, or a tranquil hillside retreat—is a powerful allure for international investors. The island’s political stability, thriving economy, and world-class lifestyle make it a premier destination for those seeking a second home, a permanent residence, or a savvy investment asset.
Amid the excitement of choosing the perfect property, a practical consideration naturally arises: what are the tax implications? For many, the word “tax” can evoke complexity and concern. However, the Mauritian government has crafted a property tax regime that is notably straightforward, transparent, and highly favourable for foreign buyers. Understanding this framework is not about navigating a maze of hidden costs; it’s about gaining the confidence to proceed with one of the most rewarding investments you can make.
This guide demystifies the Mauritius property tax landscape for foreigners, transforming it from a perceived obstacle into a clear and manageable part of your investment journey.
The Golden Rule: No Annual Property Tax for Freehold Owners
Let’s begin with the most significant and attractive point for prospective buyers: Mauritius has no annual property tax for freehold residential property owned by foreigners.
This is a cornerstone of the island’s investment appeal. Unlike many European countries, the United States, or other popular investment destinations that levy an annual municipal tax, land value tax, or “council tax” based on property value, Mauritius does not charge this recurring yearly levy on the ownership of your freehold home.
This means that once you have purchased your property, you are not faced with a constant, yearly government bill simply for holding that asset. This provides tremendous predictability for your long-term financial planning and significantly reduces the annual cost of ownership, making Mauritian real estate even more attractive from a holding-cost perspective.
Understanding the One-Time Taxes: The Transactional Costs
While there is no annual tax, the Mauritian system does apply taxes at the point of transaction—specifically, upon the purchase and, eventually, the sale of a property. These are one-time costs that are clearly defined and calculated.
1. Registration Duty (Stamp Duty)
This is the primary tax payable by the buyer upon the acquisition of a property. The rate is progressive and based on the purchase price. The current structure is as follows:
- For the first MUR 2.5 million (approximately USD 53,000): 5%
- For the portion of the price above MUR 2.5 million up to MUR 5 million (approx. USD 106,000): 4%
- For the portion of the price above MUR 5 million: 3%
It’s important to note that these rates apply to all freehold acquisitions, whether by Mauritians or foreigners. There is no premium or surcharge for international buyers.
Example Calculation:
If you purchase a luxury villa for MUR 30 million (approx. USD 640,000), your Registration Duty would be calculated as follows:
- 5% on first MUR 2.5m = MUR 125,000
- 4% on next MUR 2.5m (MUR 2.5m to MUR 5m) = MUR 100,000
- 3% on the remaining MUR 25m = MUR 750,000
- Total Registration Duty = MUR 125,000 + MUR 100,000 + MUR 750,000 = MUR 975,000
This duty is payable to the Registrar-General Department upon the formal registration of the deed of sale.
2. Land Transfer Tax (LTT)
This tax is applicable on the sale of certain types of property, particularly those within development schemes like IRS (Integrated Resort Scheme), RES (Real Estate Scheme), or PDS (Property Development Scheme). Crucially, this tax is levied on the seller, not the buyer.
The standard rate is a flat 5% of the gross sales value. However, a significant incentive exists: if the seller has held the property for at least five years, the Land Transfer Tax is reduced to 0%. This policy is designed to encourage long-term investment and stability in the market rather than short-term flipping.
As a buyer, you do not pay this tax, but understanding it is important for your overall market knowledge and for negotiations.
Other Fiscal Considerations: Income and Capital Gains
A comprehensive tax picture involves what happens when you generate income from your property or eventually sell it.
- Rental Income Tax: If you choose to rent out your property, the income generated is subject to income tax in Mauritius. This income must be declared to the Mauritius Revenue Authority (MRA). The island operates a progressive personal income tax scale, but it’s essential to note that Mauritius has a network of Double Taxation Avoidance Agreements (DTAAs) with over 40 countries. This can prevent you from being taxed twice on the same income. Professional property management companies can often assist with tax-efficient structuring and declaration.
- Capital Gains Tax: In a move that further enhances its attractiveness to investors, Mauritius has no capital gains tax. This is a monumental benefit. When you eventually decide to sell your property, any profit you make from the appreciation of its value is entirely tax-free. This allows you to fully reap the rewards of a growing market and makes Mauritius an exceptionally efficient jurisdiction for building and realizing property wealth.
The Importance of Professional Guidance
While the system is designed to be simple, engaging professional local expertise is non-negotiable. A reputable Mauritian law firm specializing in real estate and a qualified accountant are indispensable partners. Their role is to:
- Ensure Accurate Calculations: They will precisely calculate your Registration Duty and any other minor notarial fees.
- Handle Compliance: They will manage the entire process of filing and paying taxes to the relevant authorities on your behalf, ensuring full compliance.
- Advise on Structure: They can provide advice on the optimal legal structure for your purchase (individual name, trust, company) based on your personal circumstances and long-term plans, particularly concerning inheritance and rental income.
- Navigate Double Taxation: They will advise on how the DTAA between Mauritius and your home country applies to you, ensuring you don’t pay more tax than necessary.
Conclusion: A Framework Designed for Investment
Mauritius hasn’t just created a favourable tax regime by accident; it is a deliberate and strategic policy to attract foreign direct investment and high-net-worth individuals to its shores. The absence of an annual property tax, the clear and predictable transaction taxes, and the powerful combination of no capital gains tax and beneficial double taxation treaties create an environment of unparalleled fiscal efficiency.
For the foreign investor, this means you can focus on what truly matters: selecting a property that fulfills your lifestyle dreams and investment goals. The financial picture is clear, predictable, and supportive of long-term wealth creation. You can invest with the confidence that your slice of paradise is not only beautiful but also a strategically sound and fiscally efficient asset.
Your Mauritian property journey is about embracing a new life of sun, security, and sophistication. Let the clarity and favour of the tax system be the solid foundation upon which you build your dream.