October 27, 2026 Westimmo

Buying Property in Mauritius from Canada: Tax, Financing and Residency

Buying in Mauritius from Canada: no tax treaty between the two countries, Form T1135, the foreign tax credit, how to pay and the residence permit.

Canadian residents can buy in Mauritius through EDB-approved programmes, and a property worth more than USD 375,000 qualifies the buyer for a residence permit. What sets Canada apart is the tax position: Canada and Mauritius have no tax treaty in force. As long as you are a Canadian tax resident, you report Mauritian rent and gains to the Canada Revenue Agency (CRA), and it is Canada’s own foreign tax credit, not a treaty, that stops you paying tax twice on the same income.

Is there a tax treaty between Canada and Mauritius?

Not at present. Finance Canada’s list of tax treaties in force has no entry for Mauritius. The Mauritius Revenue Authority (MRA) page on double taxation agreements puts Canada among 19 treaties still under negotiation (page checked in October 2026).

In practice, buyers from the UK or France get protections that you do not: no treaty article allocates the right to tax rent or capital gains, and there is no negotiated reduced rate. Each country applies its own law, and the Canadian credit is the safety valve. For a comparison, see buying in Mauritius from the UK, where a treaty does exist.

How does the money get from Canada to Mauritius?

Non-citizens can pay in US dollars or in any other freely convertible currency. The EDB guidelines name the US dollar and the euro, but not the Canadian dollar. Before you wire anything, ask the notary and the developer whether your currency is accepted as it is or whether you should convert to USD first.

Once the funds are in Mauritius, payment follows a set pattern: 85% of the price goes to the developer in Mauritian rupees, and the remaining 15% can be paid in foreign currency or in rupees. If you pay in anything other than USD, the EDB uses the selling rate in force on the day the deed is signed to test the residence threshold. A transfer in Canadian dollars can therefore mean two conversions, CAD to USD and then USD to rupees. The exchange-rate risk, and ways to limit it, are covered in our article on currency risk when buying property.

The bank and the notary will also ask where the money comes from. We describe what to prepare in proof of funds for a Mauritian purchase.

Can you borrow in Mauritius to buy?

In IRS, RES and PDS schemes, a loan from a Mauritian bank is allowed only for the part of the price above USD 750,000. The first USD 750,000 must be transferred from abroad and paid to the developer in rupees; the loan, repayable in convertible currency, covers the rest. On a USD 400,000 property, your deposit is therefore the whole price. Bank conditions are set out in our guide to borrowing as a foreign buyer.

What can a Canadian buyer purchase?

The same properties as any other foreigner: a home in an approved IRS, RES or PDS project, or a resale of one of those properties. The EDB guidelines (January 2025) allow purchases by non-citizens, companies, sociétés civiles and trusts run by an approved trustee. Our comparison of PDS, IRS, RES, R+2 and Smart City explains the schemes, and the map of new programmes shows what is on offer.

What is the threshold for a residence permit?

A residence permit is granted when you acquire a property worth more than USD 375,000, or the equivalent in a convertible currency. The property counts as acquired once registration duty has been paid to the Registrar-General; the notary then issues a certificate of registration and transcription, which goes with the application. Permit types are covered in our residence permit guide.

The permit lets you live in Mauritius. It does not, in itself, end your Canadian tax residence; more on that below.

What does the purchase cost on top of the price?

EDB processing fee: MUR 25,000 per application, non-refundable.
Registration duty on a new IRS or RES property: USD 70,000 or 5% of the value, whichever is lower. In a PDS: 5% of the value.
Resale of a programme property: 5% land transfer tax paid by the seller and 5% registration duty paid by the buyer.

On a new property at USD 400,000, registration duty is USD 20,000, because 5% of 400,000 is below 70,000. The other costs are in the real cost of buying.

How does Canada tax a property in Mauritius?

Residence is the starting point. A resident of Canada reports income from all sources, in Canada and abroad. Rent collected in Mauritius goes on your Canadian return, and so does a gain made when you sell.

Does a Mauritian permit change my Canadian tax residence?

Not by itself. The CRA has no single numerical test: you remain a factual resident if you keep significant residential ties to Canada, and its page gives the example of a worker abroad whose spouse and children stay in the family home. A spouse, dependent children or a home kept in Canada weigh heavily, and each case is judged on all the facts.

The CRA also describes an exit through a treaty: if you are a resident of a country that has a tax treaty with Canada, and the treaty treats you as resident there, you may be treated as a non-resident of Canada. Because Mauritius has no treaty with Canada, that route does not apply as it stands to a move to Mauritius. If you plan to settle in Mauritius and leave Canadian tax residence, document the decision with a Canadian tax adviser. The Mauritian side is explained in how many days make you tax resident in Mauritius.

Do you report the property on Form T1135?

Form T1135 lists specified foreign property. You must file it if the total cost of that property was more than CAD 100,000 at any time in the year. The test is cost, not market value, and holdings add up. Personal-use property is excluded; the CRA reads that as property used primarily for personal purposes, meaning more than 50%.

A rented home has to be reported if it is rented with an expectation of profit. The CRA’s own example is a vacation condo rented for 8 months with a reasonable expectation of profit and used by the owner for 4: it is not personal-use property and goes on the T1135. A home rented only to recover its costs, with no expectation of profit, is treated as personal use. The form is due on the same date as your income tax return, and penalties apply for late filing or omissions.

How do you avoid paying tax twice on rent?

In Mauritius, rent from a Mauritian property is Mauritian-source income. If the tenant is a company or other entity rather than an individual, it withholds 7.5% of rent paid to a resident landlord and 10% of rent paid to a non-resident, according to the MRA’s Tax Deduction at Source Guide (2025 edition). If the tenant is an individual, nothing is withheld and the landlord must declare the rent. The tax bands and your options are in rental income tax in Mauritius.

In Canada, you report the same rent converted into Canadian dollars and claim the foreign tax credit. The CRA caps the credit country by country: you can generally claim the lower of two amounts, the foreign tax actually paid and the Canadian tax payable on your net income from that country. The federal credit is calculated on Form T2209 and carried to line 40500. Outside Quebec, a second form (T2036) applies for the provincial credit; in Quebec, Revenu Québec sets the rule.

Use the Bank of Canada exchange rate for the day the income and the tax arose. Keep your Mauritian tax assessments and withholding receipts: the CRA asks for official receipts of foreign tax paid with a paper return, and may ask for them after an online filing. Because the credit is capped, Mauritian tax above the Canadian tax on that income cannot be fully recovered.

What happens when you sell?

While you are a Canadian resident, the gain is taxable in Canada and is worked out on Schedule 3 of your return. Mauritian resale rules (5% land transfer tax paid by the seller in a programme, and 30 days’ written notice to the EDB before the sale) are in selling as a foreigner.

Do not assume the principal residence exemption covers a home abroad. The CRA page does not address that case and refers situations outside Canada to its telephone service. It does state that the part of a home used to earn income is not covered, so a Mauritian flat that is partly rented does not get a full exemption.

What mistakes should Canadian buyers avoid?

Assuming a tax treaty protects you from double taxation: there is none, and the Canadian credit is capped.
Forgetting the T1135 when the property’s cost, added to other foreign assets, passes CAD 100,000.
Testing the USD 375,000 threshold at yesterday’s rate: the EDB uses the rate on the deed date when you pay in a currency other than USD.
Letting the property without going through the programme company or the manager it has appointed: the guidelines require this for these properties.
Believing that a Mauritian residence permit takes you out of Canadian tax residence.

To compare budgets by area, start with the property price guide. If you are planning a purchase from Canada, tell us about your project and we will match it to eligible programmes. Canadian tax matters are for your adviser in Canada.

Sources and checks

Planning a property project?

Let’s talk about your project in Mauritius

Westimmo guides you through the analysis, selection and securing of your property project in Mauritius.