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Budget 2016-2017 Highlights: A housing policy that suits the needs of all

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11Aug

Budget 2016-2017 Highlights: A housing policy that suits the needs of all

Government has the deep conviction that a decent shelter is the next most important lever to lift families out of poverty, the Minister of Finance and Economic Development, Mr Pravind Jugnauth underlined in his 2016-2017 Budget, speech regarding the housing policy.

In this context, he announced the launching of a programme of decent shelters for the absolute poor under the Marshall Plan, which comprise the construction of at least 800 housing units over the next three years. Measures concerning low income families include Rs 1 billion for the construction and completion of 1,900 units of up to 50 m2 each on 16 sites across the island; and Rs 155 million for the rehabilitation programme of National Housing Development Company Ltd (NHDC) housing estates.

The monthly income limit for eligibility under the NHDC social housing scheme will be raised from Rs 10,000 to Rs 20,000. Families who own a house on municipal land and could not avail of the opportunity given to purchase the land will be able to buy it at a nominal cost of Rs 2,000.

In view of protecting families from the tough and traumatising Sale by Levy experience, all arrears of interest on loans contracted from the NHDC and the Mauritius Housing Company Ltd, are being waived, provided the capital amount outstanding is duly repaid. This measure applies to families with a household income not exceeding Rs 15,000

Supporting families to acquire their residence

The Finance Minister also elaborated on measures reflecting Government’s commitment to support families in their efforts to invest in constructing and acquiring their residence.

The following conditions apply:

  • A Mauritian citizen acquiring a new house or a new apartment during the period 1 September 2016 to 30 June 2020 for an amount not exceeding Rs 6 million will be eligible to full exemption from registration duty. There will be no age restriction.
  • A first time buyer will now be allowed to buy bare residential land free of registration duty, on the first Rs 2 million, provided the acreage does not exceed 20 perches.
  • No age restriction and a person who did not own a residential property as at 29 July 2016 will also qualify for the above initiative.
  • The VAT refund scheme regarding the construction of a new dwelling or acquisition of a newly built apartment is being revamped. Henceforth, the Mauritius Revenue Authority will refund VAT up to a cap of Rs 500,000 instead of the current Rs 300,000.
  • Under the VAT refund scheme relating to the construction of a new dwelling or acquisition of a newly built apartment, the maximum floor area eligibility criteria is being removed; the household income eligibility is being increased more than three-fold to Rs 2 million per annum; extension of the eligibility to construction on top of an existing building; the scheme is being extended to 2020; and the upper limit of Rs 2.5 million in relation to the construction value is being raised to Rs 4 million.

Promoters, will be allowed to build and sell residential units of up to Rs 6 million, free of land transfer tax, instead of Rs 4 million currently. The scheme is being extended to 2020.

Furthermore, no registration duty will be payable on a secured housing loan not exceeding Rs 2 million, instead of the current threshold of Rs 1 million.

Presently, a first-time home-owner is allowed to deduct from his taxable income, the interests paid on a secured housing loan that was contracted on or after 1 July 2006. As from the income year 2016/17, this date restriction is removed.

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