The France-Mauritius tax treaty explained for French residents investing in Mauritian real estate: rental income, capital gains, IFI, and inheritance.
For French residents investing in Mauritian real estate, the France-Mauritius tax treaty is one of the most important pieces of the puzzle. Signed in 1980 and updated since, the convention prevents double taxation between the two countries and structures how income, capital gains, and wealth are taxed across the two jurisdictions.
This article walks through what the treaty actually covers and what it means for a French buyer in Mauritius.
What The Treaty Does
The treaty between France and Mauritius determines, for each type of income, which country has the right to tax it. The principle is that income should not be taxed twice on the same person across the two countries. In practice, this means each type of income is either taxed in only one of the two countries, or taxed in both with a credit mechanism that offsets the double burden.
Rental Income From A Mauritian Property
Rental income from a property located in Mauritius is taxed in Mauritius. The standard Mauritian rate of 15% applies after deductible costs.
For a French resident, this rental income must still be declared in France. France applies its progressive income tax to the rental income, but grants a tax credit equal to the French tax that would have been due on the same income. The net effect is that French residents pay tax once, in Mauritius, at the Mauritian rate.
Capital Gains On Resale
Capital gains on Mauritian real estate are not taxed in Mauritius. Under the treaty, capital gains on real estate are taxable in the country where the property is located. Since Mauritius does not levy capital gains tax on residential real estate, no tax is due on the gain.
This is one of the most significant advantages of investing in Mauritian real estate as a French resident.
Wealth Tax (IFI)
The French wealth tax (Impôt sur la Fortune Immobilière, IFI) applies to French tax residents on their worldwide real estate holdings, including properties in Mauritius. The treaty does not exempt French residents from declaring their Mauritian property in their IFI return.
However, Mauritius does not levy an annual wealth tax, so there is no double taxation to resolve. The Mauritian property simply enters the French IFI base if you remain a French tax resident.
If you become a Mauritian tax resident (by spending more than 183 days in Mauritius), you generally fall out of IFI scope, subject to specific rules.
Inheritance Tax
The treaty includes provisions on inheritance. In general, real estate is taxed for inheritance purposes in the country where it is located. Mauritius does not levy traditional inheritance tax, which means that a Mauritian property passing to heirs is not subject to Mauritian inheritance tax.
French inheritance tax may still apply if the deceased was a French tax resident, but the treaty provides credit mechanisms to avoid double taxation in cross-border cases. What This Means In Practice
For a French resident who is not (yet) a Mauritian tax resident, owning a Mauritian property typically means:
Rental income is taxed in Mauritius at 15%, with no additional French tax thanks to the treaty credit.
No capital gain is taxed on resale.
The property must still be declared in France for IFI (wealth tax), if applicable. Inheritance planning is needed to coordinate French and Mauritian rules for transmission.
Important Caveat
Tax treaties evolve, and each individual situation is different. The mechanics described above are the general framework. Personalised advice from a tax adviser working in both jurisdictions is essential before making investment decisions based on tax outcomes.
For a discussion specific to your situation, contact our team.