Mauritius Finance Act 2025: Key Real Estate Tax Reforms and Their Impact

Change

The LTT on transfers of property to non-citizens under EDB schemes (RES, PDS, Smart City, etc.) will double from 5% to 10% for deeds registered on or after 1 July 2026.

Impact

  • Property acquisitions by foreigners become more expensive.

  • Developers targeting foreign markets will need to adjust pricing and marketing strategies.

  • If a deed includes both immovable and movables without separate valuation, the entire value may be subject to LTT (risk of higher tax).

Action

  • Clearly stipulate in contracts whether LTT is to be borne by buyer or seller.

  • Anticipate accelerated sales before July 2026 to avoid the higher rate.

Change

In addition to LTT, a 10% registration duty applies to non-citizens purchasing property. This doubles the effective tax burden: 10% LTT + 10% duty = 20% on the deal value.

Impact

  • Foreign buyers will face significantly higher transaction costs.

  • Could slow demand in the high-end market, particularly in PDS/Smart City projects.

  • Creates urgency to register deeds before 1 July 2026 to avoid the new duty.

Action

  • Developers should recalculate final selling prices and provide clear cost simulations to clients.

  • Buyers should seek tax advice and carefully time deed registration.

Change

If property deeds cover both real estate and movables (e.g., furniture, equipment) without a separate valuation, a flat 5% LTT applies to the combined value.

Impact

  • Sellers lose the ability to reduce the tax base by allocating part of the price to movables.

  • Increases the risk of paying higher LTT where no inventory is provided.

Action

  • Always prepare a detailed annex listing movables with individual values.

  • Consider using an accredited valuer for large deals.

Change

A new Smart City fee per square metre is introduced for subdivisions within Smart City developments.

Impact

  • Developers will face additional project costs.

  • Prices of units within Smart Cities may rise to absorb the fee.

  • Project financials and feasibility studies must be recalibrated.

Action

  • Update financial models to include the Smart City fee.

  • Inform investors and buyers about the new cost component.

Change

The AMT at 10% of adjusted book profit now applies to real estate companies (previously applied mainly to hotels, insurance, financial intermediation, telecoms).

Impact

  • Companies cannot reduce effective tax below 10% via deductions or exemptions.

  • Profitability of real estate developers will be reduced, particularly those relying on incentives.

Action

  • Run AMT simulations for FY 2026/27 onwards.

  • Reassess tax planning strategies and timing of deductions.

Change

The compulsory VAT registration threshold is reduced from Rs 6M to Rs 3M in annual taxable turnover. Effective 1 October 2025.

Impact

  • Many small and medium real estate agencies and promoters will now fall under VAT.

  • Buyers of new properties will see VAT included on invoices (where applicable).

  • Cash-flow impact: agencies must manage VAT collection and input claims.

Action

  • Register for VAT before October 2025 if turnover > Rs 3M.

  • Update invoicing systems, contracts, and sales brochures to show VAT breakdown.

Change

E-deeds are now legally valid provided they include a compliance declaration and are executed with proper electronic signatures and audit trails.

Impact

  • Facilitates digitisation of real estate transactions.

  • Reduces administrative delays and reliance on paper-based systems.

  • Requires strong security and compliance tools (tamper-proof audit trails, STR/KYC).

Action

  • Adopt compliant e-signature and e-deed systems.

  • Include standard “compliance declaration” wording in deeds.

  • Train staff on digital KYC and AML monitoring.

  1. Foreign deals more expensive → could dampen foreign demand.

  2. Developers need to reprice projects and adjust sales strategies.

  3. Smaller agencies hit by VAT → compliance burden and price adjustments.

  4. Smart City developers face new fees → higher cost per m².

  5. Companies subject to AMT → less room for aggressive tax planning.

  6. Digital transformation → e-deeds and compliance declarations become standard.

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