Mauritius today is one of the world’s prime property investment destinations, having recently received the World Bank’s ranking as the top African country for doing business.
As a foreigner, as long as you have a minimum of six million Mauritian rupees (about R2.1m) to invest, you are able to buy an entry level apartment in a condominium development.
Construction and real estate is now the second-fastest growing sector on the island, according to the Mauritius Board of Investment (BOI), so the choice of property on the market is also expanding.
Where are the investment hotspots?
The island as a whole has experienced very stable growth with property appreciating at around 5.5-6% pa in US$ terms,” says Rob Hudson, Property Consultant for Mauritius Sotheby’s International Realty.
“Traditionally most foreign investment has been channelled into the resort developments along the coast or in the coastal towns, but the current hot spot in Mauritius is the Moka Smart City,” he says..
Moka Smart City is located 12km inland from Port Louis, which is comparable to where Sandton is in relation to Johannesburg city centre. Moka’s rapid development over the last 10 years has made it the commercial hub of Mauritius – absorbing 40% of the workforce, and holding 70% of the purchasing power in Mauritius. In line with the smart city concept – location, biophillic design and community – Moka Smart City, which was developed by ENL Property, offers residential, commercial and industrial investment opportunities. There is already a wide range of facilities and amenities in place and operational – including services and roads infrastructure, schooling, shopping centre, sports club, offices and private Curtin University with approximately 2 000 students.
Another popular residential development area is around Grand Baie in the north. Le Clos du Litteral, just outside the town, comprises luxury plantation-styled residences from about R8.7m, and Le Parc de Mont Choisy Golf and Beach Resort will launch phase 3 later this year, with phases 1 and 2 already sold out.
In neighbouring Pereybere is Ki Resort Villas, with apartments being launched later this year and priced from about R3.15m. And the nearby Opalines apartments and penthouses, set in stunning landscaped gardens.
In the west, the established development hubs are Black River and Tamarin, the latter of which is home to La Balise Marina. And in the south is Heritage Villas Valriche, an exceptional 2 500-ha estate set against sea and mountain, where villas are selling from US $800 000 (about R9.3m).
Rules of investment
Investment opportunities fall within the Property Development Scheme (PDS), which has replaced the Integrated Resort Scheme (IRS) and the Real Estate Scheme (RES) by combining the best aspects of both.
The PDS allows non-citizens to buy property, with authorisation from the BOI, outside the developments specifically designated for foreign buyers, as long as the building or development is more than two storeys high, and not built on the Pas Geometrique (leasehold) land that makes up most of the island’s coastal front line.
A PDS project has a minimum of six residential units and can be a mix of luxury villas, apartments and penthouses, all including management services and amenities. PDS projects also include high-quality public space and leisure/commercial amenities and facilities.
The advantages of the PDS to South African Investors, explains Hudson, is that “a flat 5% property tax, or land transfer tax is applicable, whereas – under the previous IRS – it was a fixed fee of US$70 000.” Another huge benefit for South African investors is that – providing they acquire the property for US$500 000 or more – they are eligible for Mauritian Residency. Each buyer can claim residency for themselves, one spouse, and dependent children.
Buying to let
Berry Everitt, MD of the Chas Everitt International Property Group, says even without a permanent residence permit, foreign investors are allowed to buy several apartments as buy-to-let investments, either as tourist accommodation or as residences.
He says there is now an excellent selection of suitable apartments in desirable locations that not only offer excellent value but are also in high demand among both short-term and long-term tenants.
“This type of investment doesn’t come with an automatic right of permanent residence in Mauritius, but it does open up a relatively inexpensive avenue of offshore diversification for South Africans, who have shown themselves to be very keen to own property on the island.
“In fact, our associates in Mauritius tell us that investor interest is so high in the wake of the changes to the legislation that several new developments that had previously been on hold for lack of buyers are now going ahead,” says Everitt.
On the other hand, the Invest Hotel Scheme (IHS) is available for buyers looking to invest in a hybrid product between real-estate development and hotel property. Under the IHS, hotels are allowed to sell villas, suites or rooms to individual buyers, enabling them to finance refurbishment, reconstruction, alteration, conversion or upgrading their hotels.
The owner is allowed to occupy the unit bought for a maximum of 45 days in any period of 12 months, and has access to all the facilities of a new luxury resort hotel with amenities like F&B, full-service spas, health and fitness centres, resort-style pools, sophisticated business centres and maid service, as well as the promise of rental income.
Mauritian banks will make mortgage loans available to foreign investors, which is convenient for South Africans who need financing because South African banks cannot finance the off-shore residential property. “The Mauritian banks,” Hudson explains, “offer finance of – typically – up to 60% of purchase price over a bond term period of 15 years with interest rates of between 7% and 9%.” The credit assessment criteria are similar to those applied by South African banks, ie the value of the property as security, and proof of income sufficient to service the bond repayments.
“South Africans over the age of 18 have a foreign investment allowance of R10 million a year, provided they have a tax clearance certificate from SARS, and the transfer of funds is approved by the Reserve Bank,” says Everitt.
Forecasts show that property prices in Mauritius are expected to grow by 40% over the next decade, and Mauritius offers secure ownership rights. And – hey – it’s a tropical beach paradise, so you just can’t go wrong investing in this beautiful island destination.
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