Buying a property in Mauritius
Foreigners can not buy real estate in Mauritius in the PDS programs, IRS, RES IHS, regulated by the government.
The PDS programs IRS, RES or IHS must be approved by the BOI (Board of Investment): environmental standards, job creation, bank guarantee …
– There is a tax treaty with France dated 11 December 1980 (income tax, eg treaty to avoid double taxation, and capital).
– More than a convention of the United Nations against corruption.
Let’s see the different schemes: PDS / IRS / RES / IHS:
The PDS system
Introduced in 2015, the “Property Development Scheme (PDS)” is a new real estate development high-end device, designed to replace the IRS and RES. The big news compared to other concepts is that it focuses on the integration and overlooked dimension of Mauritians. Thus at least 25% of the homes will be sold to local people or the Diaspora (Mauritians abroad).
A real estate project under PDS must include:
– At least six luxurious homes on a freehold land with an area of at least 4220m2 and not exceeding 21 hectares.
– Common areas of quality designed to promote social interaction.
– Commercial facilities, amenities and leisure facilities premium in line with the standard of development.
– Daily management services (safety, security, waste collection, cleaning service, etc …).
– Community contribution to the welfare of the community.
During an acquisition of more than 500 000 USD, the buyer is eligible for residence permits, thus it can spend more than 6 months in Mauritius and become tax resident of Mauritius = enjoy all the tax benefits.
Who can buy property under the PDS scheme.
– A natural person.
– A company registered under the “Companies Act”.
– A society whose statutes were deposited in the “Registrar of Companies”.
– A limited partnership in accordance with the “Limited Partnerships Act.”
– A trust (trustee) whose guardianship services are provided by a qualified administrator.
– A foundation according to “Foundation Act”.
The IRS system (Integrated Resort Scheme)
The first device was launched in 2002 by the Board of Investment (BOI) to develop luxury real estate on the island and make possible real estate acquisition for a nonresident. By buying a property “IRS” of more than $ 500,000 value, the investor becomes the owner in fee and gets an automatic right of residence in Mauritius. This right extends to the spouse and any dependents.
The IRS property programs should offer high-end leisure facilities; a golf or a marina, private pools, high quality food, and a management service for each property. This service is usually provided by a hotel group on the same site.
Note that for each villa built under the IRS, the developer must pay a social contribution of 200,000 rupees that will serve local project financing. The first IRS project (Tamarina) was born in 2005 on the West Coast.
The RES system (Real Estate Scheme).
A similar mode of investment to the IRS but designed for smaller development areas. They must be greater than 1 acre or 4 221m2 but should not exceed 10 hectares. We are therefore on more human scale projects. The device was launched in December 2007. As for the sets submitted to the IRS, the RES includes the provision within the building complex commercial facilities and leisure, as well as various services: security, maintenance, gardening , garbage collection and domestic helpers.
The RES target a wider customer since there is no minimum price unlike the IRS. However, the right of residence is not automatic, as is the case with the IRS, but you will be eligible if you bought a property in the amount of $ 500,000 or more, or that you meet one of the conditions of licensing residences. (Contact us for details).
The IHS system (Invest Hotel Scheme)
This device was launched in September 2009, allows the acquisition of rooms, suites, apartments or villas in high class hotels internationally renowned (5 *).
No minimum purchase price, no residence permit related to the acquisition but often a very attractive rental guarantee.
Possibility of occupation of up to 45 days per year financial income. Ability to use overnight stays in other hotels of the group. (Contact us for more information).
Example: The acquisition of a room, offers the possibility to use your days in the Seychelles, the Maldives and many other destinations in the world.
The rest of the time your property is leased by the operator of the hotel, and generates revenue. Note: All maintenance costs of the property and equipment are supported by the hotel.
In all these devices, the revenue generated will be taxed at a fixed rate of 15%.
Why invest in Mauritius
• Firstly, it is a strong demand for tourist residences:
The tourism business is booming: in 2011, 980,000 tourists (for a population of 1.2 million), 46% of French against 750,000 in 2005 and 500,000 in 2000. The number of tourists has quadrupled since 1990.
2,000,000 tourists are expected by 2017, so a real need and additional tourist residences.
Mauritius appears in 4th place in countries where it is necessary to invest in real estate, after Canada, Hong Kong and Switzerland (according to the Telegraph 21/11/2011).
The Mauritian property market offers competitive advantages in terms of price and quality of offers and many advantages (entertainment, thriving economy, attractive tax) that guarantee a sustainable and high value.
The potential gain is important because there is a high demand for Mauritian and foreign investors and bids will decrease a few years.
• There is a political and legal stability protecting investors in Mauritius
Political stability: parliamentary republic since 1992, there are three main parties, and total independence of the judiciary.
The legal system protect investors (French right mixture and English) while controlling investments.
Mauritian tax is very attractive:
According to the double taxation agreement Franco Mauritian dated 11 December 1980 (Article 6) states:
” Income from a Mauritian property and owned by a French (resident for tax purposes in France) are taxed in Mauritius ”
A French investor who buys a property in Mauritius, and put him in rent, property income is then taxed according to Mauritian law at 15%.
Other advantages :
– Tax rate of 15% on corporate profits
– No tax on capital gains
– No tax on dividends received from a Mauritian company
– No CSG / CRDS
– No tax on real estate gains
– No wealth tax on goods purchased in Mauritius
– No tax on inheritance tax based on the tax residence of the heirs. (Contact us).