In 2004, the government introduced the Integrated Resort Scheme (IRS), in an effort to boost direct foreign investment (FDI) into the country. Under the IRS, foreigners can purchase luxury villas of up to 1.25 arpents (5,276 sq. m.) each. As a property-owner, a residency permit is also granted, which is extended to the investor’s family. A minimum investment of US$500,000 is required to obtain residency status.
Then in 2007, the government introduced the Real Estate Scheme (RES), allowing foreigners to buy cheaper, albeit still expensive, properties. Prices start from around US$300,000, although any real property valued at less than US$500,000 does not grant the coveted status of permanent residence. The RES allows small landowners to create clusters of mixed-size dwellings targeted at foreign investors.
The following entities qualify to buy real estate in the country under both schemes — a non-citizen of Mauritius, a company registered as a foreign company under the Companies Act 2001, a company incorporated under the Companies Act 2001 (local company), a Society where its deed is deposited with the Registrar of Companies, and a trust where the trusteeship services are provided by a qualified trustee.
“The fact that the Mauritian property market was closed to foreign buyers until 2004 created a pent-up demand for homes, especially leisure property,” says Jonathan Tagg of Pam Golding Properties.
“Until 2008 the only available properties were within IRS schemes, where prices were beyond the reach of most buyers. In late 2008 the government introduced the RES projects and property was available from $400,000. These new developments enabled buyers to acquire property in the popular towns of Grand Baie and Tamarin, which created an additional wave of interest which has driven the market,” Tagg added.
Analysis of Mauritius Residential Property Market »
A 500-sq. m property in Port Louis can produce income from rent of around 6.17% per annum. The general rule here is that the smaller the property, the lower the yields. With a 200-sq. m property, the yield can go down to about 4.5%.
Capital Gains: There are no capital gains taxes in Mauritius.
Inheritance: There are no inheritance, gift, wealth, or estate taxes.
Residents: Residents are taxed on worldwide income at a flat rate of 15%. Residents are entitled to income tax allowances that vary depending on the family circumstance of the taxpayer.
Properties are mostly quoted in either Mauritian Rupee (MUR) or US dollars (US$).
Rent: The initial rent is regulated by the Fair Rent Tribunal and cannot be changed within the first three years of tenancy. Rent increases must be justified by the landlord.
Tenant Security: A landlord must go through the court system when evicting a tenant, as only District Courts have the power to evict. In case of eviction due to landlord’s use of the property, the court can order that the tenant be compensated for any prejudice suffered.
Mauritian culture is a product of settlement by inhabitants from other civilizations, French, European, Indian, Chinese, English, and African. There is no indigenous culture. This makes Mauritius a rich melting put of religions, foods, and influences.
English is the official language, but French is widely spoken and Creole, a French dialect, is preferred by locals.
The Government is embarking on an ambitious diversification strategy, encouraging the Information and Communications (ICT) sector, and promoting the island as a seafood hub.
The economy is estimated to have expanded by 3.5% in 2014, after real GDP growth rates of 3.2% in 2013, 3.4% in 2012, 3.6% in 2011 and 4.2% in 2010, according to the Bank of Mauritius.
In 2014, unemployment stood at 7.8%, slightly down from 8% in the past two years.
The budget deficit stood at 3.2% of GDP in 2014, from 3.5% in 2013, 1.8% in 2012 and 3.2% in 2011, according to the Bank of Mauritius. Inflation was 4% last year, from 3.6% in 2013, 5.1% in 2011-12, and 1.7% in 2010, according to the Bank of Mauritius.
Tourism continues to grow. Tourist arrivals rose by 5.1% y-o-y to 826,950 people during the first ten months of 2014, while tourist revenues rose by 11.5% to MUR35.94 billion (US$1.11 billion), based on figures from the Ministry of Tourism and Leisure.