In an effort to render the Mauritius fiscal system better understood by the residents and expats, we endeavour to present select proposed enactments as announced in the Mauritius 22/23 Finance Budget, thus providing our interpretation of such sections of the relevant theme.
The below tax amendment was announced in the 22-23 Budget, and has now been issued by the MRA.
VAT Refund on Residential Building
Provision will be made for a VAT refund on a residential building, house or apartment to be effected not later than 30 days from the date of receipt of all documents in support of an application for refund instead of 30 days from the date of receipt of the application.
One of the conditions to be eligible to make an application for VAT refund on a residential building, house or apartment is that the cost should not exceed Rs. 3 million. This will no longer be applicable and will be replaced by the condition that the covered area constructed should not exceed 1,800 square feet.
What Does This Imply?
One could now spend more than 3 mio MUR (upward the amount is uncapped) so long as the covered area (not the plot area, ie gardens, pools, parking etc) is 1800 sq feet.
Alternatively, if one buys 2 or more separate apartment units, each @1800 sq ft, and then architecturally joins them, thus rendering a liveable space of 3600 sq ft or more!
Mode of Operation
• The applicant or the spouse of the applicant shall be a citizen of Mauritius of 10 years of age or oven
• The construction of a residential building, house or residential apartment shall be completed in the period ending 30 June 2025;
• The applicant or his spouse shall be the owner or co-owners of the residential building, house or residential apartment;
• In the case of the purchase of a residential apartment or house from a property developer, the amount of VAT refundable shall not exceed the purchase price multiplied by the factor 0.104.
• The refund is applicable on the construction or acquisition of a first residence only; and
• No refund shall be made in relation to an immovable property
a) situated on Pas Geometriques;
b) acquired under –
- the Investment Promotion (Real Estate Development Scheme) Regulations 2007;
- the Investment Promotion (Property Development Scheme -PDS) Regulations 2015;
- or the Investment Promotion (Invest Hotel Scheme – IHS) Regulations 2015; or
c) situated in a Smart City under the Investment Promotion (Smart City Scheme) Regulations 2015.
FOR EXPATS: The budget also makes provision for the acquisition of property by non-citizens, outside of the approved schemes (PDA/Smart City/HIS). By extension, the vat refund applicable on such properties could be beneficial in the price finalized between the vendor and the purchaser.
At Temple Group, it is our view that Mauritius practices a linear, mature and optimised economic policy, one that supports foreign direct investment within its territory as well as to other states, providing clear legal framework on property rights, succession planning and inheritance. This recent announcement, pending enactment into law, is testament to the progressive outlook of the state towards its population and towards the world at large.
For more information, please contact Aditi Boolell and Esmarie Swanepoel.
DIRECTOR: CORPORATE SUPPORT SERVICES
ESMARIE SWANEPOEL DIRECTOR: TEMPLE EXPAT DESK
Tel: +230 210 3685
Email: [email protected]
Facebook: Temple Corporate Services