Everything about the taxation of French residents investing in real estate in Mauritius ...
For several years, many French have chosen to invest in Mauritius. The favorable conditions for real estate investment and the very attractive tax system continue to seduce. This Indian Ocean Pearl enjoys political stability and a very reassuring economic dynamism for investors. The idyllic landscapes and the gentle art of living have truly made Mauritius a must-live destination.
Becoming a tax resident
The Mauritian government has regulated the real estate market and its openness to foreigners by defining the conditions making the purchase of a freehold property possible. This approach aims to control the different types of investments on the island and ensure the quality of real estate projects.
– To promote an attractive real estate development
– To ensure the quality of the "Mauritius'' destination in line with its positioning on the tourism and travel market.
Double Taxation Treaty
A single tax on income and rental income: capped at 15%.
The real estate income of Mauritian source, derived by a resident French, is not taxable in France.
Extract of the agreement between France and Mauritius:
Article 6 – Income from real property:
“Income derived by a resident of a State (France), gained from a property located in the other State (Mauritius) is taxed in that other State (Mauritius)”
Upon sale of property
Upon sale of a property, NO tax is applicable on the capital gain.
The capital gain made from the sale of property held in Mauritius by a French tax resident is not taxable in France. In case of repatriation to France or local reinvestment, there will be no tax in France.
Extract of the agreement between France and Mauritius:
Article 13. Capital gains:
“The gains that a resident of a State (France) gets from the sale of the property referred to in Article 6 and located in the other State (Mauritius) is taxed in that other State (Mauritius)”
In Mauritius, there is no inheritance tax. In case of legacy, the property will be part of the inherited assets in France.
In the convention, no mention is done about inheritance. In practice, a person inherits a property following the death of his parents. The property is immediately transmitted once the deed of death is received by the notary in Mauritius.
For more information, contacting a tax expert is possible.
Taxes in Mauritius
In Mauritius, there are no real estate tax or council tax. The only tax on a property is due when buying:
– The BOI (Board of Investment) tax representing 5% of the property purchase price.
If you lease your property, you will generate a rental income. Rental income is taxable at 15%.
Tax optimization
Depending on the case, creating a local company (equivalent to SCI in France) to acquire your property is possible, and allows you to further optimize your tax benefit in Mauritius.
For an acquisition of a real estate through a real estate company with several partners, only one shareholder (and his family: spouse and children) may obtain the title of resident.