Mauritius: A high-end property destination on the rise22nd Apr 2018
A home away from home
Best known to foreigners as a sought-after tourist destination, Mauritius is now home to thousands of expatriates from across the world. Some are employed as skilled workers, others as professionals, yet others have invested in companies to take advantage of the island’s favourable business ecosystem and tax laws.
Still others have chosen to retire on the island due to its relatively affordable cost of living and its pleasant environment. With the government’s declared policy of ‘Work, Live, Play’ for foreigners, the island-nation envisions becoming one of the best places in the world to live.
As a place to live or to have a second residence, this peaceful, multi-racial country inhabited by descendants from Europe, Asia and Africa, has a lot to offer indeed: modern infrastructure, good air connectivity, a warm climate all year round, political stability, social harmony, security, good international schools, world-class leisure amenities, as well as a healthy and
In recent years, many South Africans have elected to live in Mauritius, either as employed professionals, investors, or simply families looking for a safe environment in which to raise their children. It is estimated that South African expats living in Mauritius add up to nearly 10,000. Over the last decade, of all properties sold to foreigners, some 20% were snapped up by South Africans.
The high level of security found on the island, the availability of international English-medium schools and the proximity to South Africa are amongst the top-rated on the criteria list of SA expats. A 4 to 5-hour flight connects the two countries, meaning that families and friends back home are never too far. The private health system is also world-class, with a number of well-run and well-staffed private clinics easily accessible.
Opportunities for foreigners to buy real property in Mauritius
It’s been over 20 years now that Mauritius first joined the select club of tropical destinations offering luxury properties to discerning foreign investors. Under the so-called Integrated Resort Scheme (IRS) and Real Estate Scheme (RES) schemes, scores of high-value residential units have made happy buyers, living here permanently or on short frequent visits. Many owners choose to join a rental pool, deriving income from their investment which will be subject to local income tax of 15%. However, on the disposal of the property, there is no capital gains tax. There is also no inheritance tax.
Currently non-citizens can acquire property in Mauritius under any one of four existing schemes. For more information please find a link to the Board Investment of Mauritius
The Property Development Scheme (PDS)
PDS has replaced the former IRS and RES regimes. Under PDS, luxurious residential units are developed on freehold land of at least 4041m2, with adjoining high quality public spaces and recreational amenities and providing a host of day-to-day management services, including security, to residents. Since the PDS regime was launched in 2015, 11 projects have been approved by the Board of Investment. There is no restriction on the minimum price at which a PDS property can be sold. Buyers having invested a minimum of USD 500,000 are eligible for a residence permit.
The Invest Hotel Scheme (IHS)
The IHS scheme allows property developers to sell hotel rooms, villas and suites as separate units to individual buyers. The buyer then enters into a lease agreement with the seller and the unit leased to the seller may be used by the unit owner for up to 45 days in the year. IHS provides investors with an opportunity to enjoy rental income without the hassle of having to manage and market the property themselves. Units under IHS may not be sold for less than USD 500,000.
Purchase of Apartments at G+2 level
The Non-Citizens (Property Restriction) Act was amended in 2016 to allow foreigners to purchase apartments in condominium developments of at least two levels above ground (G+2). The acquisition price for such apartment must be in excess of MRU6 million (approximately R2.15m).
Purchase of residential units within smart cities
The Smart City concept was launched in Mauritius in 2015 to favour the emergence of eco-friendly integrated working, living and leisure property developments. Residential units will be developed in these smart cities and will be available for acquisition by non-citizens.
As a high-growth sector, real estate has been, for some years now, the main contributor to foreign direct investment flows to Mauritius. In 2016, FDI in real estate reached MRU9.9bn, of which as much as MRU 7.9bn was invested in IRS/RES/HIS projects. With a projected 10% growth in real estate sold to foreigners for the coming year, it might be the time to buy.
A Mauritius Trust is a structure frequently used by foreigners for the legal ownership of real property acquired in Mauritius. It provides for optimal asset protection and transmission. Non-residents can set up trusts in Mauritius. ABAX is a licensed trustee and provides comprehensive trust formation and administration services.
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