Taxation levy on property in Mauritius when the owner is living in France

Taxation levy on property in Mauritius when the owner is living in France

Mauritius offers a heavenly scenery with its beautiful landscape, turquoise blue water lagoons, and sandy beaches, to its inhabitants and tourists. And this landscape is attracting an ever-increasing number of people that want to buy a property out of France for either retirement, holidays or to move abroad. But, before buying a real state property, it is important to find out about taxation and more precisely, the taxation of a property when purchased in Mauritius while living abroad. It is worth nothing that the  laws and taxes are different. As we all know it is not a discovery to anybody that the tax burden in France is very high. As compared to the regions of the Indian Ocean. That why , the island is a cherish destination for investors. Although, it is better for you to be familiar with the  Mauritian tax specificities before finalizing a  real state property purchase so as to avoid making any mistakes.

The advantages procured by the Franco-Mauritian tax treaty

To have a clear idea about the amount of taxes to pay when purchasing a property in Mauritius, it is worth looking at the convention between Mauritius and France. Signed on 11 December 1980, and amended in 2011, based on the model for the Organisation for Economic Co-operation and Development (OECD). And the latter stipulates that to obtain Mauritian tax resident status ( that is benefitting from the island’s very advantageous tax regime), a Frenchman must live in Mauritius for at least 6 months of the year.

It also stipulates that the property acquired in Mauritius by a French national shall not be included in the calculation of the IFI (real estate wealth tax).These regulations offer advantages for Frenchmen  who want to invest in real estate property in Mauritius  since it  allows them to avoid a levy without breaking the law, thus help save money.

Lower taxes in Mauritius than in France

Thanks to this treaty, Frenchmen buying a property in Mauritius benefit from tax exemptions and a more appealing tax system than in France. But this is not the only legal measure that makes taxation less cumbersome. In France taxes are numerous and significant, meanwhile the situation is very different in this country located in the heart of the Indian Ocean. Thus, taxes on real estate capital revenues  from movable property that we hold in France do not exist. As well as local taxes (property tax and housing tax) and the IFI that we mentioned earlier. Consequently, only revenue taxes have to be paid to the Mauritian government. In the long run , this leads to substantial savings and an increase in their purchasing power. To find out more about the taxation of a Mauritian asset when you live in France, do not hesitate to contact us.