(Seychelles News Agency) - The Seychelles Registration Department has begun a review to identify the foreign-owned property in the island nation in preparation for the implementation of a new tax expected to take effect this year.

Wendy Pierre, the Registrar at the Department, recognises it will be a challenging excercise "as we will need to cover all owners including new ones as well.”

Pierre said a new system was being designed "to capture information about foreigners who are buying properties in Seychelles. With this, we will be able to distinguish foreigners from citizens when properties are acquired.”

The property tax will apply to foreigners, be it individual or companies, who already own residential and tourist establishments as well as businesses in Seychelles, a group of 115 islands in the western Indian Ocean. It will also apply to any future purchase of property by foreigners. 

The idea for a new property tax was raised in the 2017 budget address by Peter Larose, the minister of finance, after concerns from members of the National Assembly.

Property tax is a tax assessed on real estate and it is usually based on the value of the property.  The property can be classified as land, buildings or other immovable improvements to the land which increase the value of the real estate.

The tax rate will be 0.25 percent of the value of the property.

The revenue collected will be invested in the education, health, and transport sectors as well as for the building of houses. The government expects to build 25 houses in 25 districts every year.

Marcus Elizabeth from the Ministry of Finance, Trade and Economic Planning said: “The Ministry of Finance, Ministry of Habitat is still in the working progress of drafting the relevant legislation alongside the Department of Legal for the implementation of the new tax system.”

Elizabeth adds that “the modalities to finalise this law requires utmost attention in view of the magnitude and complexity, therefore we want to ensure that we have a good piece of legislation in place.”

The tax on foreign-owned properties is expected to be collected by the Seychelles Revenue Commission from October to December of each year.