Tax Benefits For Real Estate Investors In Madagascar

Published on October 4, 2025 and written by Cyril Jarnias

Madagascar, the Great Island of the Indian Ocean, continues to attract real estate investors from around the world. Beyond its paradise beaches and unique biodiversity, the country offers a particularly advantageous tax framework for those looking to invest in real estate. Let’s explore together the tax benefits that make Madagascar a prime destination for savvy investors.

An Attractive Local Tax System: Madagascar’s Best-Kept Secret

Madagascar has implemented a tax system particularly favorable to real estate investors, whether domestic or foreign. This policy aims to stimulate the country’s economic development while attracting foreign capital.

Competitive tax rates

The Malagasy tax regime offers significant advantages for real estate investors. Among the highlights are:

• A corporate tax capped at 20%, one of the lowest in the region
• Moderate registration fees when acquiring real estate properties
• Reduced real estate capital gains tax for long-term investments

Targeted exemptions to boost investment

The Malagasy government has implemented incentive measures for certain types of real estate investments:

• Full tax exemption on profits for the first five years for major tourism projects
• 50% reduction in registration fees for land acquisition intended for major real estate projects
• Possibility of accelerated depreciation for new commercial or rental buildings

These measures aim to encourage investments in key sectors of the Malagasy economy, particularly tourism and high-end residential real estate.

International Agreements: Madagascar, a Strategic Tax Hub

Madagascar has leveraged its geographical position and history to develop a network of international tax agreements particularly advantageous for real estate investors.

Advantageous tax treaties

Madagascar has signed double taxation avoidance agreements with several countries, including France, Mauritius, and Canada. These agreements offer several benefits:

• Elimination of double taxation on rental income
• Reduction of withholding taxes on dividends and interest
• Facilitation of tax information exchange between signatory countries

A bridge between Africa and Asia

Madagascar’s strategic position makes it an ideal entry point for investors looking to develop their activities between Africa and Asia. The country benefits from preferential trade agreements with the European Union and the United States, offering unique opportunities for real estate investors targeting international expansion.

Property and Residence Taxes: A Reduced Tax Burden

One of the most attractive aspects of the Malagasy tax system for real estate investors lies in the moderation of property and residence taxes.

A reasonable property tax

The property tax in Madagascar is calculated based on the rental value of the property. Its rate varies between 5% and 10% depending on the region, which remains relatively low compared to other investment destinations. Additionally, deductions are available for newly constructed or renovated properties, thus encouraging improvements to the real estate stock.

Residence tax: a flexible system

The residence tax in Madagascar is generally the responsibility of the occupants, whether owners or tenants. Its amount is calculated based on the rental value of the property and available municipal services. For investors, this means a reduced tax burden on rental properties.

Targeted exemptions

The Malagasy government has implemented property and residence tax exemptions for certain types of properties:

• Full exemption for 5 years for new residential constructions
• 50% reduction for 3 years for renovated or expanded buildings
• Permanent exemption for properties used for educational or health purposes

These measures aim to encourage the construction of new housing and the renovation of existing real estate stock, creating interesting opportunities for investors.

Madagascar vs Other Destinations: An Undeniable Competitive Advantage

To better understand Madagascar’s tax attractiveness, it’s interesting to compare its regime with other popular real estate investment destinations.

Madagascar vs Mauritius

Although Mauritius is often considered a tax haven, Madagascar offers comparable, if not superior, advantages in certain areas:

• Corporate tax: 20% in Madagascar vs 15% in Mauritius
• Real estate capital gains tax: 20% in Madagascar vs 25% in Mauritius
• Registration fees: 5% in Madagascar vs 5% in Mauritius

Madagascar stands out with more generous exemptions for tourism projects and greater flexibility in applying international tax conventions.

Madagascar vs Morocco

Compared to Morocco, another popular destination for real estate investors, Madagascar offers several advantages:

• Tax on rental income: 20% in Madagascar vs 31% in Morocco
• Property tax: 5-10% in Madagascar vs 10-30% in Morocco
• Exemptions for tourism projects: more generous in Madagascar

Additionally, Madagascar offers easier property access for foreigners, without the restrictions that exist in Morocco.

Madagascar vs Thailand

Although Thailand is a popular destination for real estate investment in Southeast Asia, Madagascar offers significant tax advantages:

• Possibility for foreigners to acquire land, unlike in Thailand
• Lower tax rates on rental income (20% vs progressive scale up to 35% in Thailand)
• More advantageous tax treaties with Western countries

Conclusion: Madagascar, a Land of Tax Opportunities

Madagascar positions itself as a prime destination for real estate investors seeking an advantageous tax framework. With its competitive tax rates, targeted exemptions, and favorable international agreements, the Great Island offers an environment conducive to real estate investment profitability.

The combination of attractive taxation, a growing real estate market, and largely untapped tourism potential makes Madagascar a unique opportunity for savvy investors. Whether for residential, tourism, or commercial projects, the Red Island offers fertile ground for capital growth while benefiting from substantial tax advantages.

However, as with any foreign investment, it’s crucial to research thoroughly and work with local professionals to navigate the subtleties of the Malagasy tax and legal system. With a well-informed and strategic approach, Madagascar can truly become your next land of tax and real estate opportunities.