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Mauritius’ real estate sector is set for major changes as Parliament has released the Finance Bill 2025 (Miscellaneous Provisions) as a moratorium clarifying key legislative announcements in the National Budget Speech held in June 2025.
Delay on Property Tax increase for Foreigners:
Registration duty and Land Transfer Tax (LTT) will remain at 5% for non-citizen buyers in EDB Property Schemes. As from 1 July 2026, it will increase from 5% to 10%.
Capital Gains Tax cancelled
The proposed capital gains tax of 10% of resale value or 30% of the capital gain (whichever is higher) that was announce in the National Budget Speech has been cancelled. On release of the Finance Bill, this was not passed and has been completed removed.
Developer tax burden delayed, yet fair share contribution applied.
Increased Land transfer tax from 5% to 10% for developers will only come into affect from 1 July 2026. However, large property firms with chargeable company incomes above Rs 24 million will incur an additional 5% tax.
Minimum tax introduced for real estate companies
The Finance Bill introduces a 10% Alternative Minimum Tax (AMT) on book profits for real estate companies, ensuring they pay a baseline tax even if deductions reduce their regular liability.
Smart City scheme incentives clarified
Projects with construction already underway before June 5 and valid permits will retain partial benefits, such as VAT recovery and income tax relief. However, Projects issued with Smart City Certificates after June 5, 2025 will lose major tax perks, including:
- VAT exemptions on construction materials and infrastructure
- 8-year income tax holiday on real estate activities
- Customs duty exemptions on machinery and materials
- Exemptions on registration duty, land transfer tax, and morcellement fees
The 2025 finance reforms mark a clear shift in government policy curbing incentives for large-scale property development, delaying certain property taxes for foreign buyers, while introducing additional taxation on profitable real estate businesses and large developers. These changes are likely to reshape investor sentiment and project viability across the Mauritian property landscape.
