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Feb 12, 2013

Mauritius transaction costs are high


How high are realtors’ and lawyers’ fees in Mauritius? What about other property purchase costs?

Transaction Costs

Who Pays?
Registration Fee 5% buyer
Notary Fee 0.50% - 2% (+ 15% VAT) buyer
seller
Stamp Duty MUR1,000 (US$32) seller
Real Estate Agent’s Fee 1% (+ 15% VAT)
1% (+ 15% VAT)
buyer
seller
Transfer Tax 5% - 10% seller
Situation Plan MUR1,500 (US$48) seller
Costs paid by buyer 1.725% - 3.45%
Costs paid by seller 6.15% - 11.15%
ROUNDTRIP TRANSACTION COSTS 7.875% - 14.60%
See Footnotes
Source: Global Property Guide

How difficult is the property purchase process in Mauritius?

The Government has recently launched programs that allow foreign nationals to own residential properties through various investment schemes.

Mauritius luxury house for saleThe Permanent Residence Scheme (PRS) is attractive to foreigners who wish to stay in Mauritius for long periods or visit the country frequently. A minimum investment of US$500,000 in qualified business activities makes a foreigner eligible for permanent residency. This also allows the permanent resident foreigner to acquire 1.25 arpents (5,276 sq. m.) of land, located at least 100 metres away from the seafront for residential purposes.

Under the Integrated Resort Scheme (IRS), foreigners can buy luxury villas in a resort setting of international standards. A property-owner under this scheme is also entitled to a residency permit, which allows the owner and his/her family to reside in Mauritius for the whole duration of the ownership. Each villa can only be up to 1.25 arpents (5,276 sq. m.). IRS is open to Mauritius and non-Mauritius citizens, and local and foreign companies under the Companies Act (of Mauritius) 2001.

The Scheme to Attract Professionals for Emerging Sectors (SAPES), targets skilled and talented foreigners who wish to offer their services in Mauritius. This is available for the Information & Communication Technology and Financial Services sectors.

Mauritius beachfront real estateThe Board of Investment may approve other sectors to participate in the Scheme. Aside from being able to acquire a residential property, the foreigner can also work and reside in Mauritius for three years, with an exemption from taxes and duties on the importation of household and personal belongings. There is also the possibility of permanent residency.



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Registration Fee
As of January 2012, registration fee is levied at a flat rate of 5% of the property value.

Notary Fee
Notary fees are set according to a cumulative schedule. Notary fees are around 0.50% to 2% of the property value.

NOTARY FEE

Property Value, MUR (US$)
RATE
Up to 250,000 (US$8,065) 2%
250,000 – 750,000 (US$24,194) 1.50%
750,000 – 1,750,000 (US$56,452) 1%
Over 1,750,000 (US$56,452) 0.50%
Source: Gobal Property Guide

Stamp Duty
Stamp duty on property transactions generally costs MUR1,000 (US$32).

Real Estate Agent’s Fee
Real estate agent’s fee is generally around 1% of the property value, plus 15% VAT. The seller and the buyer are each liable for their own fees.

Transfer Tax
As of January 2012, transfer tax is levied at a flat rate of 5% of the property value if the seller has owned the property for more than five years, and at a flat rate of 10% of the property value if the seller has owned the property for less than five years.

Situation Plan
The seller obtains a situation plan from a land surveyor and the situation plan generally costs MUR1,500 (US$48).





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