The perfect all-rounder5th Dec 2019
The property market in Mauritius has been a major contributor to GDP since government enabled foreign investment via the Investment Promotion Act in 2000. Possibilities for residential property purchases by foreigners have been refined over the years, with the Integrated Resort Scheme (IRS) being launched in 2006. According to investinmauritius.co.za, capital growth has exceeded 300% in the last decade.
The decision to open the market increased the number of US Dollar Millionaires (USDMs) to 3 200, with a combined wealth holding of US$12 billion by the end of 2015. The number of USDMs in Mauritius is expected to reach 7 200 by 2025.
Meanwhile, property price growth is expected to climb to 40% over the next decade. South Africans make up about 21.7% of the foreign buyers on the island. The island is a four-hour flight from Johannesburg. Traditionally attracted by the stable economy, the island’s positioning as the gateway to Africa, tax benefits and permanent residency granted with property investments to the value of US$500,000, among others, safety is now a major drawcard.
“I like to call Mauritius the perfect all-rounder, particularly for South Africans,” says Richard Haller, director, Pam Golding Properties (Mauritius). “It has proven to be a very strong offshore investment for South Africans who invested there five to 10 years ago.”
The property market trades in US dollars and euros, as well as Mauritian rupees, which have proved exceptionally stable against the hard currencies. “The Mauritian rupee didn’t move when the market crashed in November last year,” says Haller.
Mauritius has a stable government and offers a safe and secure living environment. It is multilingual and multicultural. English is widely spoken. The island offers an ever-growing mix of retail and medical facilities as well as international schools and university campuses, which makes it possible to live there very comfortably. “US$500,000 gets you, your spouse and children up to the age of 24 permanent residency if you buy in one of the designated developments and maintain ownership of the property,” says Haller.
What’s more, no capital gains or inheritance tax is applicable to properties purchased. Those who choose to make their investment available for rentals are realising returns of 3.5% in the long term and 6% in the short term.
A Property Development Scheme (PDS), which has replaced the IRS and Real Estate Scheme (RES), allows for the development of a mix of residences and for their sale to noncitizens, citizens and members of the Mauritian diaspora.
The IRS targets the top-end segment of the international property market with attractive lifestyle investments. IRS developments generally include luxury amenities such as a golf course, marina, beach club and wellness centre, as well as restaurants and other facilities.
Under the RES, residential units are sold to noncitizens at no minimum price. The RES allows the development of any mix of residences for sale on freehold land (not exceeding 10 hectares). The scheme targets those who want to invest, work and live in Mauritius, and those wanting to own a second home or holiday home on the island.