Madagascar attracts foreign investors and private buyers for several reasons: the low cost of land compared to other Indian Ocean islands and a property market that is still relatively cool, with limited competition.

At the same time, foreigners face strict legal restrictions: direct ownership of land is prohibited. This is why the Seychelles, Mauritius, and the Comoros are ahead in popularity. However, this does not mean that access to real estate ownership is completely closed. There are several legal mechanisms that allow foreigners either to maintain full control over a property or to use it under lease arrangements.

Our guide covers all options available to foreigners for owning and using property in Madagascar, along with their advantages, disadvantages, risks, and practical details.

Contents:

  1. Pros and Cons of Buying Property in Madagascar
  2. Legal Options for Foreigners to Own and Use Property
  3. Unregistered Land in Madagascar
  4. Property Prices in Madagascar
    1. Mortgages and Loans in Madagascar
    2. Real Estate Taxes in Madagascar
    3. Home Insurance

Pros and Cons of Buying Property in Madagascar

Before exploring the legal mechanisms of ownership, it is important to understand the overall appeal of the market and, especially, its risks. Young and relatively promising markets are rarely without drawbacks, and Madagascar is no exception.

Pros of property in Madagascar:

  • Low entry threshold. Madagascar apartments in Antananarivo are priced around $600–800 per m², while houses start at $30,000–40,000, 5 to 10 times cheaper than in neighboring Mauritius or the Seychelles.
  • Tourism-driven income potential. Tourist arrivals exceeded 400,000 in 2023. In popular locations, villa rentals generate 8–12% annual returns in foreign currency.
  • Low competition. Few foreigners are active on the market, making it possible to purchase local properties at bargain prices.
  • Cheap labor. With an average salary of $70–100 per month, it is affordable to hire housekeepers or gardeners without significant expense.

Cons of property in Madagascar:

  • Restrictions for foreigners. Foreign nationals cannot own land outright; they can only lease it for up to 99 years.
  • Bureaucracy and corruption. The homes for sale in Madagascar title registration may take 12–18 months or longer, especially without “donations” to local officials. The country ranks 142nd out of 180 on Transparency International’s Corruption Perceptions Index.
  • Low market liquidity. Demand is limited, and reselling property may take years.
  • Infrastructure challenges. Only 11% of the island’s roads are paved. Electricity is not universal; just 26% of the population has access. Internet and medical facilities outside the capital are limited.
  • Political instability. Madagascar has faced repeated unrest, with protests escalating into coups in 2002 and 2009. The country’s political stability index is -1.3 (on a scale from -2.5 to +2.5), among the lowest in Africa.
  • Hazardous wildlife. Shark attacks are recorded in coastal waters, crocodiles in rivers, and schistosomiasis parasites in freshwater.
  • Language barrier. Only about 5% of the population speaks English. Transactions typically require French or the assistance of a translator.

Foreign nationals are not permitted to own land directly in Madagascar, but long-term lease agreements (bail emphytéotique) are allowed for up to 99 years. Under such leases, tenants can construct buildings, sublease the property, transfer rights by inheritance, or sell the lease contract to another party. This option is relatively cost-effective and suitable for both private housing and the development of small hotels.

Other ownership structures in Madagascar:

  • Ownership of buildings without land. By law, foreigners may own Madagascar properties for sale, but not the land beneath them. In practice, this means purchasing a building while leasing the underlying plot. This is the most straightforward and legally transparent scheme for acquiring «turnkey» real estate.
  • Establishing a local company. For businesses and large-scale projects, it is common to register a Malagasy legal entity. The law allows full foreign ownership of such companies, which in turn may own land, buildings, and other assets outright. The downside: the company must pay taxes and maintain full accounting records. A reliable local accountant or lawyer is essential.
  • Investment certificate (Certificat d’Investisseur). This mechanism is available to major investors who commit at least $500,000 to a project approved by Madagascar’s Economic Development Board (EDBM), typically in tourism, agriculture, or infrastructure.

Unregistered Land in Madagascar

One of Madagascar’s major challenges is the issue of unregistered land. A plot may be occupied and used by someone for decades without any formal ownership title or legal status. This creates significant risks and makes legal protection difficult. In practice, the weak and fragmented cadastral and land registration system is the main source of widespread insecurity of land rights in the country.

To avoid purchasing such land, buyers should request all available documents from the seller (both originals and copies): contracts, land tax receipts, any ownership certificates, maps or boundary sketches, and neighbor statements. Afterward, the existence of a registration entry must be verified through the local land registry, ideally via a notary or lawyer.

If it turns out that the land offered is unregistered, the buyer should insist that the seller complete the registration process. It is possible to agree to cover registration expenses, but the funds should be held in escrow with a notary and released to the seller only after the land has been successfully registered. Written guarantees must be prepared, including penalty clauses for refusal or fraud.

If unregistered land for sale in Madagascar is now yours, stop further payments if possible and gather all transaction-related documents: preliminary agreements, transfer deeds, receipts, witness statements, photographs, and geoplans.

Next, engage an experienced lawyer or notary in Madagascar, ideally one specializing in land disputes and familiar with local authorities. Through them, verify whether the land is already registered to another party, subject to litigation, or under an expropriation order. If the seller concealed third-party rights or an existing title, you may have grounds to file a claim for damages and/or annulment of the transaction.

Property Prices in Madagascar

Madagascar does not have an official housing price index. Therefore, the following price benchmarks are based on the annual Africa Housing Finance (CAHF) review, as well as active listings from agencies and online marketplaces.

Average cost of a house in Madagascar:

Location

Property type

Approx. price (USD)

Antananarivo (city center)

Apartment, purchase (per m²)

794

Antananarivo (suburbs)

Apartment, purchase (per m²)

503

Antananarivo (city center)

Rent, 1-bedroom, per month

165

Antananarivo (city center)

Rent, 3-bedroom, per month

570

Nosy Be (prime, beachfront)

Land, per m²

up to 270

Nosy Be (second lines)

Land, per m²

45–70

Nosy Be, Ambondrona

Plot, 1200 m²

64,000

Nosy Be

Plot, 1915 m²

41,000

Toamasina (Tamatave)

House, ~100 m² (new)

45,000

Nosy Be, Andrahivo

Villa, 3 bedrooms

344,000

Mortgages and Loans in Madagascar

In theory, foreigners can obtain mortgages in Madagascar, but in practice, banks are extremely cautious with such borrowers. The main reasons are high risk levels, weak debt enforcement mechanisms, and an unstable currency market. As a result, most foreign transactions are financed with personal funds.

Banks serving foreign clients in Madagascar:

  • BOA Madagascar — «Akany» program, term up to 20 years.
  • MCB Madagascar — mortgages starting from 14% per annum, up to 10 years.
  • BMOI / Société Générale Madagascar — may consider clients with verified income abroad.
  • AccèsBanque — specializes in retail banking, but rarely issues mortgages to foreigners.

Key requirements for a home loan in Madagascar for foreigners:

  • Residence permit or long-term visa (typically at least 1 year).
  • Proof of income (in Madagascar or abroad, with official documentation).
  • Down payment of 20–30% of the property’s value.
  • Collateral in the form of the acquired property.
  • Life and property insurance (MRH).
  • Banking history is not mandatory, but preference is given to clients already serviced by a Malagasy bank.

In practice, banks are more willing to lend to foreigners who already live and work in Madagascar or run a local business. External investors almost always face rejection, especially those coming solely to purchase property. However, this restriction applies mainly to individuals; local banks are generally open to working with legal entities.

Real Estate Taxes in Madagascar

When purchasing property, foreigners are subject to Madagascar real estate taxes. These fall into three main categories: taxes on purchase, ownership, and rental income, plus several that are specific to the island.

  • Taxes on purchase. Registration fees are around 9% of the property’s value (includes state duty, notary services, and publication of the deed).
  • Annual ownership tax IFPB (Impôt Foncier sur la Propriété Bâtie). The tax base is the estimated rental value (valeur locative), regardless of whether the property is rented out. The rate is 5–7% of this amount. If the property is the owner’s primary residence, only 30% of the calculated amount is payable.
  • IFT (Impôt Foncier sur les Terrains). A land tax applied until residential buildings are constructed on the plot. The standard rate is 1% of the land’s market value.
  • Taxes on sale. Capital gains tax is 20% of the profit (difference between purchase and sale price), which must be paid to the Malagasy treasury. If the property is sold at a loss, no tax is levied.
  • Rental income tax. Individuals have progressive rates averaging 10–20%, depending on total rental income. For companies, corporate tax is 20% on rental income.

Other Madagascar property taxes include VAT tax with a rate of 20%. It applies to new developments purchased through construction companies or agencies. In some communes, additional local taxes may be charged for the use of land or property.

Home Insurance

By law, property insurance in Madagascar is not a mandatory requirement for purchasing real estate. It only becomes obligatory, along with life insurance, for the borrower when taking out a mortgage from a local bank.

However, between insuring and not insuring, the safer choice is to insure, as Madagascar is in a zone of elevated natural risks. From November to March, the island is regularly hit by cyclones and storms. In addition, there are:

  • flooding and heavy rains,
  • a high risk of fires in densely built low-rise urban areas,
  • thefts and property intrusions in tourist zones.

Basic home insurance in Madagascar package costs about $15–20 per year, but coverage is very limited. A standard policy typically costs $100–300 per year. For seaside villas in resort areas, insurance premiums usually start from $500+ per year.