Mauritius is increasingly recognised as one of the leading African property markets for foreign investors. This rise in interest is largely down to a relaxing of the laws relating to buying property on the island, and the government has reported a significant rise in the number of foreign investors, particularly South Africans. But these investors are not just buying properties on Mauritius’ exceptional coastline, they are also buying residency.
The purchase of a residential unit acquired under schemes approved and managed by the Economic Development Board – the Property Development Scheme (PDS), the Integrated Resort Scheme (IRS) and Residential Estate Scheme (RES) – offers the right to residency in Mauritius to a purchaser and their family, provided that the residential unit’s purchase price is above USD 500,000.
Owners may rent out the property, become tax resident in Mauritius and face no restriction on the repatriation of funds or revenue raised from the sale or renting of the property. Mauritius has no capital gains tax, dividends or inheritance tax and a universal tax rate of 15%.
Citizens of countries that are politically or economically unstable often wish to emigrate or take out an alternative residency or citizenship as an insurance policy if things at home take a turn for the worse. If these citizens have money to invest then it makes sense to do so in countries like Mauritius that will give them some kind of formal status in return.
So whether you are just thinking of buying a second home in a holiday destination in the Indian Ocean or you are looking to obtain a Mauritian residency permit (RP) as a ‘back-up plan’, Mauritius is an excellent option to explore.
- IRS scheme – The IRS was introduced by the government of Mauritius in 2002 to open the property market to foreign buyers on a restricted basis and thereby encourage the construction and sale of high-end residential and resort property in designated locations. Non-citizens of Mauritius automatically become eligible to an RP if they acquire a property situated in an IRS with a minimum investment of USD500,000. The property owner and their family are able to reside in Mauritius for as long as the property is held. IRS villas are often attached to leisure and recreational facilities such as golf courses, marinas or wellness centres. To date, the average cost of an IRS residence in Mauritius has been in excess of USD1.6 million.
- RES scheme – The RES is essentially a slimmed down version of the IRS that is designed to enable landowners to undertake property development on a smaller scale (not exceeding 10 hectares). There is no restriction on the minimum price for acquiring a property under the RES, so an RES property will often be more affordable than IRS property. In cases where an RES property purchase price exceeds USD500,000, or its equivalent in any freely convertible foreign currency, the property owner and their family will be eligible to apply for an RP for as long as the property is held.
- PDS scheme – The PDS scheme, which has now replaced the IRS and RES for all new developments, allows the development of a mix of residences for sale to non-citizens, citizens and members of the Mauritian Diaspora. The PDS is an integrated project with social dimensions for the benefit of the neighbouring community and allows for the development and sale of high standard residential units mainly to foreigners. Under the new PDS Guidelines, at least 25% of the residential properties developed under PDS must be sold to Mauritians and members of the Mauritian Diaspora. A foreign buyer purchasing a villa under the PDS scheme for more than USD500,000, or its equivalent in any freely convertible foreign currency, will be eligible for an RP for as long as the property is held.
More information on these options and advice on suitable structures to purchase and hold property in Mauritius is available upon request because this will depend on individual circumstances and requirements.