The 85/15 Rule and fund transfers for a property purchase in Mauritius in 2026

Among the specific features of a property purchase in Mauritius by a non-citizen, the 85/15 rule is one of the most important — and one of the most misunderstood. It determines how the price is paid, affects the budget (FX costs) and sits within a strict framework of fund traceability.

This 2026 guide explains in practical terms what the rule means, how to organise transfers, which costs to anticipate and which mistakes to avoid.

1. What is the 85/15 rule?

In the context of many acquisitions by non-citizens under approved schemes (PDS, Smart City, etc.), the regulations provide that:

• Approximately 85% of the purchase price must be paid in Mauritian rupees to the developer or seller;
• Those rupees come from the conversion of hard currencies (USD, EUR, GBP, etc.) transferred from abroad;
• The remaining 15% may be settled according to the terms set out in the contract and the applicable texts (in foreign currency or in rupees, as the case may be).

The dual objective is:

• To channel the majority of the funds through the Mauritian banking system;
• To ensure traceability and compliance with exchange-control and anti-money-laundering rules.

It is not an “85% tax”. It is a payment and conversion rule.

2. Why does this rule exist?

Mauritius controls capital flows linked to property acquisition by non-citizens. The 85/15 rule:

• Ensures that the majority of the price is converted and injected in rupees into the local economy;
• Facilitates control of the source of funds;
• Aligns with bank and EDB requirements on transaction transparency.

For the buyer, the practical consequence is simple: a large conversion into MUR must be anticipated, together with the associated costs.

3. How does payment work in practice?

Step 1 – Opening a bank account in Mauritius (if required)

In most files, the buyer (or the developer via an escrow/dedicated account) relies on a Mauritian bank to receive the funds and carry out the conversion.

Step 2 – International transfer of foreign currency

The buyer transfers the funds from their bank abroad (USD, EUR, etc.).

Banks require:

• Documented source of funds
• KYC / AML compliance
• Consistency with the purchase project (reservation agreement, developer invoice, etc.)

Step 3 – Conversion into rupees (for the ~85% portion)

Once the funds have arrived, the bank converts the required portion into MUR at the prevailing rate (or according to negotiated conditions).

Step 4 – Payment to the seller / developer

Payment is made according to the contractual schedule (especially for off-plan / new programmes): reservation, intermediate stages, handover, etc.

Step 5 – Balance (the ~15% portion)

The balance is settled according to the agreed terms (foreign currency or MUR).

4. Budget impact: FX and transfer costs

The 85/15 rule does not add an extra 85% duty, but it generates friction costs:

Illustrative example:

Property at USD 500,000.

85% = USD 425,000 to be converted into MUR.
 

If total FX + transfer cost is 1%, that amounts to approximately USD 4,250 of friction — sometimes more depending on the banks and timing.

On large amounts or multi-stage schedules, these costs become a real budget line.

5. New build vs resale: different timelines

New programme (off-plan / PDS, etc.)

• Staged payments according to construction progress
• Several transfers and conversions possible
• Need to synchronise capital calls with international transfers
• Risk of exchange-rate movement between stages

Resale

• Payment often more concentrated at deed signature
• Less splitting, but a larger single amount to transfer and convert at once

In both cases, traceability remains the same: every euro or dollar must be justifiable.

6. Fund traceability: the non-negotiable point

Whether the 85/15 rule applies in full or specific modalities exist, banks and authorities require:

• Proof of the source of funds (savings, sale of an asset, inheritance, etc.)
• Consistency of amounts with declared income and wealth
• Identity and tax-residence documents
• Sometimes bank certificates or statements covering several months

A poorly prepared file blocks the transfer, delays completion and can cause the transaction to fail.

7. Common pitfalls to avoid in 2026

1. Not budgeting for FX costs
   Many buyers only calculate price + 10% registration duty + notary, and forget 0.5–2% of FX friction.
2. Transferring too late
   International banking timelines + compliance can take several days (sometimes longer). Anticipation is essential, especially on an off-plan schedule.
3. Using multiple small banks or non-standard circuits
   The more opaque the circuit, the higher the AML blockage risk.
4. Believing one can pay 100% in foreign currency “outside the system”
   The 85/15 logic and exchange controls exist precisely to prevent that on the acquisitions concerned.
5. Ignoring the rate gap between reservation and payment
   Between reservation and handover of a programme, rates can move. Part of the FX risk sits with the buyer.
6. Mixing personal accounts and structures without documentation
   If funds pass through a company or a third-party account, justification must be even stronger.

8. Best practices to secure the transfer

1. Open discussions with the Mauritian bank as soon as the project takes shape.
2. Request a written estimate of receipt and FX fees.
3. Prepare a complete source-of-funds file before the first transfer.
4. Align the capital-call schedule (new build) with transfer capacity.
5. Keep all SWIFT messages, FX confirmations and proof of payment.
6. Coordinate notary, bank, developer/seller and adviser to avoid timing gaps.
7. Build an FX safety margin into the overall budget (see also the guide on the real cost of a purchase).

9. Link with other acquisition costs

The 85/15 rule sits on top of the other items already detailed in the real-cost guide:

• Registration duties 5% (non-citizens, since 1 July 2026 on relevant deeds)
• Notary
• Possible agency fees
• Due diligence

A non-citizen’s overall budget is therefore built as follows:

Price + 5% duties + notary + FX/transfer friction (85/15) + miscellaneous.

Frequently Asked Questions

Is the 85/15 rule a tax?

No. It is a payment rule: approximately 85% of the price must be settled in Mauritian rupees coming from converted foreign currency.

Must I open a bank account in Mauritius?

In practice yes for most files, in order to receive the funds, convert them and pay the seller/developer in compliance with the rules.

What is the typical cost of FX?

Variable. One should often allow in the order of 0.5% to 2% of friction depending on the bank, the amount and market conditions.

Does the rule also apply to resales?

It applies in the context of non-citizen acquisitions covered by the regulated frameworks. Exact modalities depend on the type of property and the payment circuit; they must be checked file by file.

What happens if the funds arrive late?

Delay in completion, possible contractual penalties, postponement of stages in an off-plan programme. Anticipating bank timelines is essential.

Can I pay more than 15% in foreign currency?

The texts and practice require compliance with the prescribed proportion. Any different arrangement must be explicitly validated within the applicable legal framework.

Are you preparing a fund transfer for a purchase in Mauritius?

Property Mauritius assists buyers with the payment schedule, coordination with banks and compliance with the 85/15 framework, in liaison with notaries and developers.

Contact Property Mauritius Agency in Pointe-aux-Canonniers for a personalised, confidential discussion.