The VAT Refund Scheme allows citizens of Mauritius to claim up to Rs 300,000 of the VAT amount incurred during the construction of their residential building.
Although it might be tempting to hire an unlicensed contractor for the seemingly low costs, you are ending up paying more money for less value (No guarantees or insurance, potential construction site desertion and lack of skills).
However, given that a registered contractor has to charge Value Added Tax by law, they must cost significantly more, right? Well, thanks to the Mauritius Revenue Authority’s VAT Refund Scheme on Residential Building, this could not be any further from the truth.
What are the steps to undertake in order to benefit from the VAT Refund scheme?
1. Determine whether you are eligible for the VAT refund
The VAT Refund Scheme on Residential Building is accessible to citizens of Mauritius over the age of 18 and only concerns the first home being built. You should be the owner or co-owner, along with your spouse, of the residential building or apartment, and both of your annual net income must not, in the aggregate, exceed Rs 1 Million.
2. Determine whether your project is eligible for the VAT refund
The total cost of construction of the residential building should not exceed Rs 3 million. Generally speaking, it is safe to say that if the surface area of your home is above 200 m2 (2152 Sq. Ft.), your application will be automatically rejected.
As mentioned above, you should also hire a registered contractor who can issue VAT invoices and provide you with a contract of service in the proper form.
The scope of this scheme will however exclude projects in relation to the following:
- Construction on ‘Pas Géométriques’
- Real State under the Investment Promotion (Real State Development Scheme) Regulations 2007
- Property Development under the Investment Promotion (Property Development Scheme) Regulations 2015
- Invest Hotel under the Investment Promotion (Invest Hotel Scheme) Regulations 2015
- Smart City under the Investment Promotion (Smart City Scheme) Regulations 2015
3. Calculate how much you can claim
The cumulated VAT amount refunded will not, in the aggregate, exceed Rs 300,000. In the scenario where you are making instalment payments to the contractor as per the advancement of the project, the minimum amount claimable per quarter is Rs 25,000. Whenever this amount is less than Rs 25,000, it may be cumulated with the next quarter as long as the cumulated amount exceeds Rs 25,000.
As per the MRA, a quarter is a period of 3 months ending at the end of March, June, September or December.
4. Check whether you are within the deadlines
The construction of the residential building must be started and completed before the 30th June 2025.
You should submit your application for refund to the MRA within 30 days from the end of every quarter during which you have paid the VAT to the contractor.
In the case seen earlier where your quarterly VAT amount does not exceed Rs 25,000 and you are applying for a refund in posterior quarters, the application will not be valid if it is made more than 12 months from the date of payment of the final amount of VAT to the contractor.
The MRA should proceed with the refund not later than 30 days from the date of receipt of the application. The application could of course be delayed in case of incomplete or incorrect information.
All application should be made directly through the MRA’s website through the dedicated form.
5. File your claim for VAT refund
You should be submitting the following documents with your first application for refund:
- VAT invoices issued by your contractor.
- Contract of service between you and your building contractor.
- Building permit issued by the District Council or Municipality and bearing your name.
- Deed of purchase of land.
- Evidence of income (Pay slip for employee or income statements for self-employed).
For the succeeding claims, you would only need to submit your subsequent VAT invoices.
Summary
- The construction must be started and completed by 30 June 2025.
- This scheme is aimed at adult citizens of Mauritius only and only on their first home.
- You or your spouse should be the owner or co-owners of the residential building.
- The total annual income of both your spouse and you should not exceed Rs 1 million.
- The cost of construction must not exceed Rs 3 million.
- Always go with a registered contractor.
- Claims for refund should be made within 30 days from the end of every quarter during which VAT has been paid.
Update 2021
Several amendments have been brought to this scheme and the upper limit has been updated. Please do not refer to this article but directly to the MRA’s website as the scheme is ever changing.
The good news however is that the application is now entirely online on MRA’s website here.
Also, while MRA may accept individual receipts for processing, you will face thorough scrutiny for each expense. Several feedback indicate that items such as garage doors are not being refunded.
Find out how much your next project is gonna cost by requesting a free quote here.
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Am I eligible for VAT refund on the construction of my new house despite the fact that l am already owner of a house given by my parents.
My contractor is not VAT registered. However, my contract with him is for labour only and all materials are bought by myself and free issued to contractor.
Will I be eligible in this case?
All above criterias are fine and I am eligible.
Same situation contractor is not a VAT registered.
My contractor is registered vat. But im paying him only labour. All materials are being bought at own cost and receipts issued on my name. Can i claim vat?
Hi…my contractor is vat registered but I came to know of this refund only recently and the construction is nearly finished. Will I be still legible for the claim? Thank you
If we dont live in MAuritius, but we are Mauritian doing construction in Mauritius can we claim the VAt
Hello I have given the construction work to my uncle and he is not a contractor. Now since he is not vat registered he dont want to sign the agreement so that I can provide mra with a proof that he is building the house. Is this a way that MRA would track non registered vat people? And will they be sanctioned?
Hi.my contractor is vat registered. He is providing the house fait e fournis n am paying vat on the price we agreed. Still the receipts must b made on my name? Or i just have to produce the contract on which its mentioned the amount paid plus vat.plz reply
Greeting,
The construction will be grey only. can I claim VAT on Aluminium/electrical/Plumbing and Sanitary items even though it is client supply?
Hi,I’m currently doing house construction starting from may 2019 and ending in october,but due to lockdown my construction is being delayed and still not yet completed,am I still eligible for vat refund.
the title deed is in the name of my parents but i have a droit de surelevation and the building permit is in the name of my father. will i be eligible for vat return
Hi i have bought a house which is not new. Am a first time buyer can claim for vat refund on purchase?
Hi i live in a pas geometric area. Will i be eligible for vat
Hi,
I don’t have any contractor, only a mason and all materials are bought by myself.
Am I still eligible for vat refund ?
Hello,
What household items are covered in this scheme.
Is aluminum doors/wood doors/ plumbing/electrical/sanitary/toilets/bathroom sink/kitchen furnitures,appliances/worktops (granites) covered
Thank you