Further impetus in store for the Mauritius property development landscape
Introduced in 2015 by the Mauritius government under the socalled Smart City Scheme, a major development is under way that could profoundly change the property landscape on the island of Mauritius: smart cities. The scheme put in place to promote these smart cities follows an ambitious economic development agenda aiming to consolidate the country’s position as a fully fledged international business and financial hub.
What is a smart city?
Revolving around the ‘work, live and play’ concept, smart cities incorporate mixed-use developments in cosmopolitan conurbations with smart technology and pioneering innovation at their core. Created as an enhancement to an existing town or as an intelligently designed new town, these smart cities will be built using the latest advancements in urban planning and digitalised technologies to promote quality of life within an ecofriendly and sustainable environment. With the prerequisite that it should be built on an extent of land of at least 21 hectares, a smart city should develop a mix of compatible land use allowing the majority of its residents to live and work in the same place. Office, business, residential and leisure components of the smart city will all need to be integrated within a coherent master plan focusing on efficiency, sustainability and quality of life. The residential component of a smart city should not exceed 50% of the project’s total land area. Residential properties developed under a smart city scheme may comprise villas, houses, townhouses, apartments and duplexes.
Investment opportunities under the Mauritius Smart City Scheme
Such a major development in the Mauritian real estate sector comes with a plethora of opportunities for potential investors, including non-citizens. To spur investments in smart cities, the Mauritius government will be offering a package of fiscal and non-fiscal incentives to different classes of investors. The foreign investor could be: a promoter seeking to engage in a project under the scheme; a developer wanting to acquire land to develop a component of a smart city project; or an individual acquiring a property in the residential component of a smart city. Provided that they are issued with the respective certificates from the issuing body – the Economic Development Board (EDB) – promoters and developers will benefit from a number of incentives, including:
- exemption from corporate tax for a period of eight years
- exemption from Value Added Tax in respect of buildings and capital goods
- exemption from customs duty other than for furniture
- accelerated annual allowance at a rate of 50% in respect of capital expenditure.
Under the scheme, foreign citizens having invested US$500,000 or more in a residential property will be eligible to apply for a residence permit for themselves, their spouse, children under 24 and up to three wholly dependent next of kin. The residence permit will remain in force for as long as the non-citizen holds the property. There is no restriction on the rental or resale of residential units bought under the scheme.
Strong interest marks debut of the Scheme
The introduction of the Smart City Scheme has been underpinned by a sharp interest from the local investor community, especially from large established landowners. To date, five projects have completed the application process, and have been issued with a Smart City Certificate from the EDB. Six other promoters have received a letter of intent. Considering the number of projects approved, or in the process of being approved, the respective promoters are vying to attract the interest of potential customers by differentiating their offering with specific hubs dedicated to education, health and medical services, logistics and free port, among others. Interestingly, one smart city promoter has applied for certification under the US-based LEED (Leadership in Energy and Environmental Design) programme. This would be a first for Mauritius, and one of very few in Africa.