Published on and written by Cyril Jarnias
New vs. Old Real Estate in Madagascar: An Evolving Market
In an economically evolving country like Madagascar, the real estate market presents unique opportunities and challenges, whether for new or old properties.
The New vs. Old Matchup: Analysis of Key Figures
In this article, we invite you to dive into the heart of the “match” between new and old real estate, examining the sector’s key figures.
Decisive Criteria for Investors
From acquisition costs to tax benefits, through resident preferences and neighborhood evolution, each segment contains specificities that can influence investor and buyer choices.
Madagascar Market Trends and Outlook
Through numerical data and detailed analysis, discover the current trends and future prospects that tip the scales in favor of one market or the other in Madagascar.
Cost/Benefit Analysis: New vs. Old Real Estate in Madagascar
Comparative Analysis of Real Estate Costs in Madagascar: New vs. Old
The Malagasy real estate market shows distinct characteristics between new and old properties, with significant financial implications for investors.
Initial Acquisition Prices
In 2025, the average price per square meter in urban areas of Madagascar stands at €604.93 (2,960,558 MGA), with significant variations by location, dropping as low as €367.05 and rising to €836.14. These prices are generally 89% lower than those in France.
| Property Type | Central Urban Area | Peripheral Area | Average Difference |
| New | €836.14 (4,092,111 MGA) | €650.00 (3,180,000 MGA) | +38% |
| Old | €604.93 (2,960,558 MGA) | €367.05 (1,796,361 MGA) | Base |
Regional Disparities
- Antananarivo: highest prices, particularly in Ivandry and Ankadimbahoaka neighborhoods
- Tamatave: increasing valuation linked to port facility expansion
- Majunga: tourist appeal generating rising real estate demand
- Lavaré: average price per m² for a house at €1,026 in June 2025
Tax Incentives and Additional Fees
The emergence of green real estate in Madagascar in 2025 comes with new standards and government subsidies promoting environmentally friendly new constructions. These mechanisms help reduce the initial cost gap between new and old, with tax benefits potentially representing up to 15% of acquisition costs for certified buildings.
Maintenance and Renovation Costs
Old properties typically require substantial renovation investments, often underestimated during acquisition.
For an old property, renovation costs can represent between 20% and 45% of the purchase price depending on initial condition and desired level of finish. Conversely, new constructions benefit from builder warranties (notably ten-year) reducing maintenance expenses during the first years.
Energy Efficiency
Accelerated urbanization and new environmental standards favor new constructions integrating energy efficiency solutions. These properties enable operational savings estimated between 25% and 40% on energy costs compared to unrenovated old properties.
Appreciation Prospects
Madagascar real estate sector experts anticipate continuous price increases through 2030, particularly in strategic areas benefiting from infrastructure improvements. New properties in developing neighborhoods of Antananarivo and tourist areas like Nosy Be show the best appreciation prospects.
Market Influencing Factors
- Development of tourist infrastructure in coastal areas
- Growing interest from foreign investors, particularly French
- Diversification of real estate offerings with innovative concepts
- Sustained demographic growth in urban centers
- Ambitious urbanization projects supported by the government
The decision between new and old real estate in Madagascar must therefore consider not only the initial price difference, but also future maintenance costs, potential energy savings, and differentiated appreciation prospects depending on regions and property characteristics.
Good to Know:
In Madagascar, the acquisition price of a new property is generally about 20% higher than that of an old property due to material quality and modern infrastructure, with prices per square meter ranging from €600 to €1,200 for new versus €400 to €900 for old, depending on regions. Tax incentives for new purchases can offset this initial extra cost, notably through property tax reductions, while notary fees are often higher for old properties due to additional administrative procedures. Regarding maintenance, renovation costs for old real estate can reach up to 30% of the property value, while new properties require less maintenance early in the cycle, although long-term maintenance with modern materials, generally less costly energy-wise, offers significant savings. In terms of added value, renovated old real estate in developing neighborhoods can offer substantial long-term appreciation potential, although experts suggest that new real estate benefits from better immediate resale capacity.
Benefits of New Real Estate in Madagascar
Quality and modernity of infrastructure characterize new real estate in Madagascar. New real estate programs incorporate recent materials, advanced construction techniques, and architecture designed for comfort and durability. These buildings benefit from enhanced thermal and acoustic insulation, electrical systems compliant with latest standards, and modern amenities (elevators, secure parking, green spaces).
List of Technical Benefits:
- High-end materials ensuring better longevity
- Effective insulation reducing noise disturbances
- Compliance with international safety standards
Energy efficiency is a major strength of new construction. Eco-construction is gaining ground through application of strict ecological standards encouraged by the Malagasy state. This translates into significant reductions in energy consumption (water, electricity), use of renewable energy (solar panels), and selection of low-consumption equipment.
Numerical Example:
- Up to 30% savings on energy bills in some new buildings equipped with green solutions.
Compliance with current standards also distinguishes these constructions: they scrupulously respect new regulations regarding fire safety, accessibility for people with reduced mobility, and seismic resistance.
Warranties offered by developers constitute an essential advantage:
- Ten-year warranty covering major structural elements for 10 years
- Two-year warranty on technical equipment (heating, plumbing…)
- After-delivery service enabling quick intervention in case of defects
Comparative Table: New vs. Old Real Estate
| Criterion | New | Old |
|---|---|---|
| Infrastructure Quality | Modern materials | Often outdated |
| Energy Efficiency | Recent standards/ecology | Poor insulation |
| Warranties | Ten-year/two-year/developer | Absent or limited |
| Taxation | Exemptions/financial aid | Full charges |
Strategic location is an integral part of new projects. They are frequently situated in immediate proximity to:
- Major roadways facilitating urban mobility
- Recent educational and healthcare hubs
- Modern shopping centers offering all essential services
This ensures a practical living environment while meeting growing demands of urban families or expatriates seeking daily comfort.
From a tax perspective, buying new property qualifies for several attractive incentives:
- Full exemption from property tax for 5 years for any new construction intended for housing
- Reduction up to -50% on registration fees for certain strategic real estate projects
- Additional opportunities for foreign investors with specific reduction (-30%) on secondary residences
In summary, these elements clearly differentiate new real estate, which offers increased legal and financial security along with a superior level of environmental requirements—perfectly aligning with the current Malagasy context marked by rapid but sustainable development-conscious urbanization.
Good to Know:
In the Malagasy context, new real estate offers modern, quality infrastructure meeting current construction standards and integrating energy efficiency technologies, ensuring up to 30% reduced energy consumption compared to old properties. Developers often guarantee a ten-year period against hidden defects, thus providing increased security for investors. These new buildings are generally located in well-served transportation areas and close to urban services such as shopping centers and hospitals, improving residents’ quality of life. From a tax perspective, buyers benefit from incentives like VAT exemption on certain acquisitions and possible financial aid, advantages rarely available for old properties, making new property purchases more attractive.
Understanding TVN Calculation in Madagascar
The non-recoverable value-added tax (TVN) in Madagascar is a specific fiscal component of the VAT system. It concerns the portion of VAT that, in certain cases, cannot be deducted or recovered by the taxable entity and thus becomes a definitive cost for the real estate purchaser or developer.
Definition and Role in the Malagasy Real Estate Sector:
- TVN applies mainly during real estate transactions, particularly to new real estate properties completed by VAT-subject developers. It aims to ensure that VAT collected on these operations effectively contributes to the state’s general budget.
- In the real estate sector, it represents a direct financial stake for economic actors since this tax is not offset by downstream recovery.
TVN Calculation by Property Type:
| Property Type | Tax Base | Applied Rate | Recoverability |
| New | Total tax-exclusive value of new property (price or total cost) | 20% | Non-recoverable |
| Old | Generally exempt or subject to registration fees depending on conditions | Not systematic | Not applicable |
- For new real estate properties, TVN is calculated on the tax-exclusive amount of the price or total cost of the property delivered by a taxable entity (example: developer). The standard rate applied is generally 20%.
- For old properties, there is in principle no systematic direct application of VAT, but registration fees are applicable. Sales between individuals often remain outside the classic VAT scope; however, specific exceptions exist in certain situations.
Specific Conditions and Possible Benefits/Exemptions:
- Certain operations benefit either from express exemption provided by the Malagasy tax code, or from special regimes reducing or even eliminating all or part of this fiscal charge.
- Non-profit organizations and associations may benefit from a reduced rate (10%) when they meet certain legal conditions regarding their rental real estate activities.
- Incentive measures sometimes exist to encourage investment in certain priority sectors (industrial free zones, social housing…), allowing temporary exemptions subject to strict compliance with legally defined criteria.
Economic and Financial Impacts for Stakeholders:
Developers
TVN constitutes an additional non-deductible charge that directly weighs on their financial structure during new projects. This impacts their overall profitability and can influence their pricing strategy towards final purchasers.
Buyers
Acquisition of a new property subject to TVN results in a higher overall cost as this tax adds to the net price paid without possibility of future recovery or direct tax compensation.
Investors
Investors are encouraged to carefully compare between new purchases (subject to TVN) and old purchases (subject only to fixed fees), which influences their asset allocation decisions according to their fiscal and financial objectives.
Synthetic Comparison – Financial Implications
| Operation | Additional Fiscal Cost | Potential Benefit/Exemption |
| New Purchase | Strict TVN application | Possible sectoral exemption |
| Old Purchase | Fixed/registration fees | Often none |
Careful consideration of the applicable regime thus enables various actors—developers as well as purchasers—to legally and financially optimize their transactions while controlling their structural fiscal exposure.
Good to Know:
The non-recoverable value-added tax (TVN) in Madagascar applies mainly to real estate transactions, playing a crucial role in the sector as a non-deductible fiscal charge. For new real estate properties, TVN is calculated based on the total property price at a 20% rate, which can significantly increase costs for buyers. In contrast, old real estate properties often benefit from different fiscal conditions, with possible exemptions according to current government policies, encouraging some buyers to turn to old properties to reduce their fiscal burden. Developers and investors must account for these calculations in their budget forecasts, as they directly affect real estate project profitability, while buyers must evaluate TVN’s financial impact in their choice between new and old. Fiscal initiatives, such as partial or full exemptions, may also be offered to encourage purchases in certain zones or housing types, thus modifying local market dynamics.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
