Real estate investment in Mauritius
To promote development and attract foreign investors, Mauritius has concluded fiscal treaties for double taxation avoidance with more than thirty countries worldwide, including France, Belgium, Luxembourg, UK, UAE, Monaco, Italy, Germany, South Africa and Australia among others
As a result, 'any property acquired in the Mauritian territory is not included in the calculation of the tax on wealth' and the income obtained from the rental or resale of real estate in Mauritius is taxable only in Mauritius and not in the country of origin of the investor.
In addition to the lower cost of construction in Mauritius (a quarter of the European cost), investing in real estate in Mauritius offers other major advantages for foreign investors such as
- No property tax
- No residential tax
- No Social charge for national debt consolidation
- No taxes on inheritance tax
The Mauritian Residence Permit
According to the regulations of the B.O.I (Board of Investment of Mauritius), permanent residence permits a non-citizen to work and live in Mauritius for a period of ten years.
The residence permit is issued according to specific investment criteria, including the real estate sector.
The Permanent Residence Permit is automatic for any investment as from $ 500,000 (US dollars) and is applicable to the investorâ€™s family including children up to 24 years of age.
This permit is attached to the acquired property and is renewable every 10 years. The foreign acquirer and his family thus benefit fully from all the advantages associated with this investment scheme.
For real estate purchases below this threshold, the acquirer investor benefits from the continuous residence on the island (6 months per year) with all the associated advantages, particularly the possibility of electing Mauritius as his tax residence. This procedure is not to be taken lightly or autonomously and requires the intervention of a specialist in property law.
Buy a real estate property in Mauritius
Non-Mauritians can acquire a real estate property under specific investment programs accessible to foreigners.
Any foreigner who wishes to make a real estate purchase in Mauritius must first of all file a written request Board of Investment (BOI) with supporting documents including among others
- Copy of Applicant's Passport
- Letter of recommendation from applicant's bank
The cost of this application is ten thousand Mauritian rupees, equivalent to ten thousand rupees, roughly equivalent to 250 Euros. However, the BOI should be approached for the details of the application, either by telephone, by a representative or by visiting the site.
If the request is accepted by the BOI, the buyer can proceed:
- to the signature of the Preliminary Reservation Agreement
- to the transfer of 10% of the total price of the purchase / investment to a escrow account opened by the notary in the name of the buyer in a Mauritian bank within 15 days
- to the signing of the deed of sale
- to the payment, in the presence of the notary, of 90% of the total price for an already constructed property or 20% if it is an investment in offplan.
The VEFA or Off-plan (Sale in Future State of Completion) in Mauritius
In contrast to the purchase of an already constructed property or the payment must be made in a single installment, the VEFA, or sale on plan, has a financial advantage of about 10% and the purchaser can expect a profitability of minimum 20% when reselling its property.
The real estate investment under VEFA/ Off-plan also obliges the developer to have a Financial Guarantee of Completion. The latter is issued by a bank designated by the authorities, subject to 60% pre-booking, ensuring that the proposed real estate project will be completed.
The VEFA is a device that allows buying a property to be built with the possibility of a gradual disbursement of the funds. A VEFA contract implies that the purchaser becomes the owner of the land upon signing the contract of sale, and then owns the dwelling as it is constructed.
This type of purchase involves the follow-up of a specific calendar to make the payments of funds through the escrow account of a notary in the following order:
- 10% upon completion of foundations
- 35% when putting out of water
- 25% upon completion of construction
- 5% on delivery of keys
Real estate purchases by a non-Mauritian citizen can be done for a property already built or in VEFA (purchase on plan) under the following devices:
- Integrated Resort Scheme (IRS)
- Real Estate Scheme (RES)
- Property Development Scheme (PDS)
- Smart City Scheme
- G+2: Apartment in a building with two or more floors with an investment of minimum of 6 million MUR. (This system does not give the right of residence and remains subject to validations this device does not give the right of residence and remains subject to the validations of the property by the B.O.I)
The third-party costs of the Mauritian real estate investment for a foreign citizen are
- Government Expenses B.O.I - 5% or US $ 25,000 (depending on investment plan and property category)
- Notary fees - 1.15%
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The French Civil Code
In order to ensure the smooth running of the sale, it is necessary to have recourse to the services of a local notary ... as stated in the Napoleonic Civil Code. It is a vestige of the French past of the island, which is not to displease French and other European investors wanting everything to be clear and understandable.
The notary will:
- Officialise the legal act
- Register; therefore authenticate the transaction and ownership
- Verify that the seller is the owner of the property to be acquired
- Ensure the validity and legality of the real estate transaction clauses
- Act as a privileged interlocutor for the purchaser who wishes to better understand the official documents written in English
The financing of a real estate purchase by a foreigner in Mauritius
A foreign acquirer who wishes to take out a loan to finance the purchase of a property
in Mauritius has the opportunity to turn to local banks. However, interest rates on borrowing are much higher than in the UK for example.
In addition, it should be noted that local banks can offer up to half (50%) of financing for the purchase of a property. Beyond 50%, the applicant must be able to give guarantees, generally equivalent to 50% of the amount lent.
Groupe Robertson Patrimoine is an international wealth and property management specialist leading real estate investment in Mauritius with 16 years of international experience.
Our firm provides you with a complete coverage before, during and after your investment, including completion of your financing file
We manage for you the formalities and procedures in order to make your acquisition a reliable and secure investment.
A unique service that no other company offers its customers here.
Groupe Robertson Patrimoine
16 years of international experience in Wealth and Property Management.
Mont Mascal, Petit Raffray - Mauritius
Tel : (00230) 262 79 78 / 58 75 00 45 / 52 51 83 74
Email : email@example.com