In July next year it will be implemented a tax on property owned by foreigners. A top official of the Ministry of Finance announced this during a consultative meeting on Thursday.
Patrick Payet, the principal secretary for finance, said that the ministry took this decision after discussing with the government.
The issue is that the real estate market is populated with foreigners. This makes prices going up which makes foreigners able to purchase but Seychellois are put in a difficult position since they cannot afford to buy at those prices.
By introducing the tax, the want to assure that there is enough land for Seychellois as well as land for the business sector to invest and develop for rent.
The tax will apply to all foreigners, individuals or companies that already own residential, tourism establishments and businesses in Seychelles and to any future purchase.
The idea of the property tax, a tax assessed on real estate and usually based on the value of the property, came out during the 2017 budget and the Cabinet of Ministers approved it two weeks ago. The rate will be 0.25 per cent of the property value, a very conservative rate to ensure that people pay it instead of trying to evade it.
The revenue coming from this tax will be invested in different infrastructures. They will ensure that there is enough land for Seychellois and the additional resources will be used for building houses. The government is looking at building 25 houses in 25 districts every year.
The new tax law will probably start from January and the Registration Division will inform foreign owners of their new tax obligation. The tax is expected to be collected by next October.
