It is important to understand the luxury property market in Mauritius and to clearly set out your priorities in order to make the right choices.
Luxury Real Estate in Mauritius
A residence permit granted under the IRS programme is valid as long as the buyer retains ownership of the property and is passed on from one owner to the next.
The IRS, RES, PDS and SCS legal frameworks
Smart City Scheme
Work, live and play is an Economic Development Board’s concept which aims at creating better working conditions in the country by encouraging its economic development.
Built 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. The focus is to deliver a happier lifestyle through the development of self-sufficient cities offering integrated sustainable solutions and ensuring minimum wastage and maximum comfort for the long-term benefit of all citizens and future generations irrespective of social and economic class.
Moka Smart City, developed by the ENL Group, is among the first Smart Cities on the island.
As with the other legal frameworks (IRS, RES and PDS), foreign investors can apply for a Mauritian residence permit upon acquisition of a residence worth at least USD 375,000.
In addition to residing in an attractive destination with a high standard of living, the acquisition of a property within an SCS development gives foreigners access to the country’s favourable tax environment. The property owner is entitled to become tax domiciled in Mauritius under certain conditions, such as a minimum stay of 183 days on the territory in the relevant financial year.
Vente en l’Etat Futur d’Achèvement (VEFA)
Garantie Financière d’Achèvement (GFA)
Stages of the acquisition process
The Contrat de Réservation Préliminaire (CRP)
This first contract between the future buyer and the developer serves to reserve the property. On signing, a down payment representing a guarantee deposit must be paid into an escrow account, generally opened before a notary.
Letter of approval from the Economic Development Board
The buyers must submit several documents required by the authorities to the promoters, so that the latter may make an application to the Economic Development Board in the name of the client for the acquisition of a property in an IRS or PDS property. The Economic Development Board examines the application and, if it is approved, submits an approval letter which permits the promoter and the buyer to finalize the sale.
The Deed of Sale (DOS)
As soon as the approval letter is received, the buyer and the seller meet before the notary for the final stage, the signing of the sale contract.
At this point the client becomes the official owner of the property.
BUYING REAL ESTATE IN MAURITIUS
Who can buy property in Mauritius
A natural person, whether a citizen of Mauritius, a noncitizen or a member of the Mauritian Diaspora.
A company incorporated or registered under the Companies Act
A societe, where its deed of formation is deposited with the Registrar of Companies
A limited partnership under the Limited Partnerships Act
A trust, where the trusteeship services are provided by a qualified trustee
A foundation under the Foundations Act
Property Development Scheme – PDS Scheme
The Property Development Scheme (PDS) enables noncitizens, Mauritians and the Mauritian diaspora to acquire a property within a prestigious residential development.
A buyer who invests more than USD375,000 (or the equivalent in another currency) in a PDS program is eligible for permanent resident status. In addition, the noncitizen and their dependents (spouse, children under 24 years of age and parents) are granted a permanent residence permit.
What’s more, the buyer and their spouse no longer need an occupation permit to invest and work in Mauritius.
The buyer becomes a tax resident in Mauritius and is not subject to any restrictions on the repatriation of funds or income from the sale or rental of the property.
The PDS harmonizes the registration tax at a single rate of 5% (instead of USD70,000 for registration of a deed under an Integrated Resort Scheme program and USD25,000 under a Real Estate Scheme).
Integrated Resort Scheme (IRS) Real Estate Scheme (RES)
When buying an IRS, a residence permit is automatically granted to the purchaser. The residence permit will remain valid as long as the holder maintains ownership of the property. This permit residence allows the purchasers to opt for a tax paradise in Mauritius and thus benefit the particularly favorable fiscal policy of the country (provided that he stays in Mauritius for more than 183 days per year). This residence permit is also valid for the purchaser’s family, like his spouse and children till the age of 24 years. It’s a great difference with the RES which does not automatically entitle the purchase to a Mauritian permit residence. A residence permit is issued to a foreigner during his acquisition of RES over 500 000 USD. If is not the case, the buyer will not be eligible for a permanent residence permit and will be able to reside in Mauritius up to six months a year in Mauritius.
Regarding the IRS and the RES, the fixed cost associated to the properties require the property owners to pay either 5% registration fee of the final value of the property, or an amount equivalent to 70 000 USD for IRS or 25 000 USD for RES. The PDS scheme thus differs from RES and IRS, in order to harmonize the programs, namely the small and large lots will be subject to the same constraints with a single tax. The registration fee of the purchase price of a residential property under the PDS scheme is 5%..
Ground +2 or G+2
The G+2 allows foreigners to invest in a condominium flat in a building with at least two floors. The sale price must not be less than MUR6 million (or the equivalent in another currency).
For any purchase above USD500,000 (or the equivalent amount in another currency) a noncitizen may apply for a long-stay visa from the EDB. This long-stay visa allows the buyer and their dependents (spouse and children under 24 years of age) to reside freely for a consecutive period of 10 years, renewable. The visa remains valid for as long as the buyer holds the property.
However, this purchase does not allow the buyer to work in Mauritius. They will have to apply to the EDB to obtain an occupation permit to carry out a professional activity.