Buying a property in Mauritius

Who can buy a property in Mauritius?

The following are authorized to buy a VEFA, IRS, RES, PDS, SCS, G 2, IHS property in Mauritius:

Property acquisition for foreigners in Mauritius

In the case of an individual, the acquisition of property requires the approval of the Prime Minister's Office (PMO). 

In the case of an investor, the acquisition of property requires the approval of the Economic Development Board (EDB).

For this purpose, various schemes for the acquisition of residential property approved and administered by the Economic Development Board have been developed.

Important:

All new IRS and Real Estate Scheme (RES) residential projects open to foreign investors in Mauritius are now grouped under the Property Development Scheme (PDS). Consequently, any property marketed under the PDS / IRS and RES names is subject to the following purchase formalities, even if the IRS and RES names are still in use.

The EDB has created a complete guide on the purchase of real estate in IRS / RES and PDS in Mauritius.

The VEFA (Sale in Future State of Completion)

The VEFA in Mauritius (Vente en État Futur d'Achèvement), also known as off-plan purchase, is governed by articles 1601 and following of the Mauritian Civil Code (based on the Napoleonic Code) and must be the subject of a notarial act. 

All IRS, RES and PDS can be acquired under VEFA. This type of program consists in buying a property that has not yet been built, that is under construction, or for which the developer guarantees the buyer a delivery after completion. In order to have an idea of the result, the buyer is given by the developer the plans, the diagrams relating to the real estate project to come.

It is also up to the developer to take all the steps required by law to obtain the building permit, take out the relevant insurance, monitor the work, etc.

Who can be interested?

The VEFA is intended for both Mauritians and expatriates. However, the latter have several advantages thanks to the real estate investment in Mauritius. Indeed, the Sale in Future State of Completion allows them to : 

Formalities to be completed for buying property in Mauritius

The purchase of a property in Mauritius includes the following steps: 

Signature of the reservation contract and deposit.

The buyer and the developer sign a contract confirming the reservation of the property to come. In the absence of a reservation contract, the developer can proceed directly to the final sales contract.

What the reservation contract must contain

The document must clearly mention the following: 

The security deposit

Following the signature of the reservation contract, the buyer deposits a deposit, which represents 2 to 25% of the value of the property, on an escrow account opened in the name of the buyer at a notary's office, or in a financial institution. Be careful; this deposit must be paid only when both parties have signed the reservation contract!

In case of non-realization of the real estate project, the promoter must obligatorily return this deposit to the purchaser. If the buyer decides not to buy, he/she must respect certain conditions to get his/her deposit back.

When the buyer signs the preliminary reservation contract in order to reserve his property under the VEFA, he is required to pay a deposit into a special account opened through the notary. Until the conclusion of the sales contract, this sum remains untouchable unless the VEFA does not materialize.

The notarial act

The deed of sale in the future state of completion is established by a notary. The Mauritian civil code provides for the content of the document as follows 

One month before the signing, the notary issues the contract, equivalent to a title deed. It indicates the rights and obligations of the buyer towards the seller - the precise and final description of the property. 

Delivery of the property 

This is when the developer hands over the keys to the buyer. This stage marks the activation of the obligatory biennial and decennial guarantees: 

Although the buyer can accept the result without reservation, he can claim the guarantee of perfect completion during the year following the reception. This is if he notices, for example, defects.

If the purchaser has reservations upon acceptance of the work, he is entitled to ask the developer to remedy them and to resume the work within a period agreed upon.

Completion guarantee

To protect the purchaser of a property intended to be lived in, the developer is obliged to provide him with 

or 

The guarantees of a VEFA construction

By choosing the VEFA, the buyer is protected by a series of guarantees:

Staggered payments for a VEFA property:

The Integrated Resort Scheme (IRS)

Introduced in 2001 by the Mauritian government and regulated by the EDB, the IRS program benefits mainly large sugar companies. It offers properties located in settings generously equipped for leisure, entertainment and wellness, such as golf courses, marinas, beach clubs, pavilions and wellness centers surrounding the residences. 

Through this program, non-residents can purchase villas, townhouses, penthouses, duplex apartments, serviced lots (maximum size of 1.25 A or 5,276 m²). They and their dependents can obtain a residence permit with a minimum investment of USD 375,000.

Owners are allowed to rent the property, become tax residents in Mauritius and freely repatriate funds or income from the sale or rental of the property. Finally, non-citizens holding a residence permit under IRS are exempted from an occupation or work permit to invest and work in Mauritius.

Who may be interested?

Mauritius has designed the Integrated Resort Scheme (IRS) to attract high-income foreigners in particular by offering them the opportunity to invest in luxury villas.

Formalities to be completed to invest in the IRS in Mauritius

Non-citizens, citizens, companies, corporations or trusts wishing to acquire a property under the IRS scheme must comply with the following steps:

The Real Estate Scheme (RES)

The Real Estate Scheme (RES) was established in 2007. The basis of the scheme is to encourage owners of small plots of land to build more affordable and less restrictive projects.

All RES projects must consist of a minimum of 6 high-end residential units, be developed on 1 to 24 acres of freehold land (less than 10 hectares) and provide the opportunity to purchase smaller properties.

If an IRS property is sold for a minimum of $375,000, the RES is not subject to a minimum sale amount. In return, the buyer is not automatically eligible for the Resident Permit unless he invests at least $375,000. He can rent the property, become a tax resident in Mauritius and freely repatriate the funds or income from the sale or rental of the property.

Non-citizens who have a residence permit under the RES will be exempted from an occupation or work permit to invest and work in Mauritius.

Who can be interested?

The Real Estate Scheme (RES) is aimed at foreigners with a limited budget who wish to live in Mauritius for a maximum of 6 months while having a home base. 

Formalities to be completed to invest in the RES in Mauritius

Non-citizens, citizens, companies or trusts wishing to acquire a property under the RES scheme must comply with the following steps :

Smart City Scheme (SCS) 

The Smart City Scheme (SCS) was designed by the government to promote Mauritius as an international business center and encourage sustainable development. As a result, each smart city : 

Exemptions by investing in the development and/or components of a Smart City in Mauritius for companies: 

Who may be interested?

The Ground 2 (G 2)

Located in a condominium and in a building with at least 2 floors, the G 2 apartment refers to a property that is at least 2 floors above the first floor. 

As announced in the 2021/22 budget and in accordance with section 5(1)(ga) of the Immigration Act, a residence permit is now granted to a non-citizen upon acquisition of residential property in a building of at least 2 floors above the first floor for an amount not less than USD 375,000 or its equivalent in any other freely convertible foreign or Mauritian currency.

The residence permit is valid as long as the non-citizen remains the owner of the residential property under the G 2 scheme.

Who can be interested?

The G 2 apartment can be sold off-plan, during or after its construction, but also, and more importantly, outside of the residential schemes mentioned above. Indeed, foreigners are now allowed to buy apartments in developments outside the approved residential programs.

The EDB also reminds that holders of a permanent residence permit and a professional earning more than USD 3,000 per month are allowed to buy a G 2 apartment as their personal residence.

The formalities to be respected to buy a G 2 apartment in Mauritius

To be eligible for the G 2 program, the purchaser must meet the following requirements: 

The Invest-Hotel Scheme (IHS) 

The IHS program, created in 2010, allows hotels to sell their rooms, suites, or villas that are part of the hotel to buyers before, during or after the construction of the hotel.

According to the EDB, the Invest Hotel Scheme (IHS) allows foreign investors and individuals to own exclusive hotel units located in Mauritius. 

A non-citizen can acquire a room (or hotel unit) in new and existing hotels that are approved under the IHS. The said room is marketed with a co-ownership regulation governed by the Mauritian Civil Code. In case of a sale off-plan, the sale is made under the VEFA system, governed by the Mauritian Civil Code.

The owner has privileged access to all the amenities of these highly equipped luxury hotels, including ancillary services such as dining, full-service spas, fitness centers and swimming pools integrated into these resorts.

The unit owner or anyone on their behalf can enjoy the unit for up to 45 days in a 12-month period, and can also earn income through the sale-leaseback model.

If the unit or room is acquired for a minimum of USD 375,000, the owner would become eligible for a residency permit.

Who may be interested?

Good to know:

A GBL company within the meaning of the Financial Services Act 2007 holding a business license is not authorized to acquire property under the IHS program.

The formalities to be respected to buy property in Mauritius under the IHS

For the acquisition of a detached villa, the investment amount must not be less than USD 375,000 (excluding taxes) or its equivalent in any freely convertible currency. For other units, no minimum investment is required.

Where a unit or any other part of the hotel is purchased from a non-Mauritian citizen, or in the case of a company with a non-Mauritian shareholder or if it is a trust whose beneficiary is a non-Mauritian citizen, or if the business partner is a non-Mauritian, the payment must be made in either Mauritian Rupees, USD, Euros, Pounds Sterling or any other convertible currency.

In case of payment made in a currency other than USD, the EDB will use the selling exchange rate prevailing at the date of application to calculate the USD equivalent and ensure that the price exceeds USD 375,000 in the case of individual villas.

In case of acquisition of a unit or any other part of a hotel by a non-Mauritian citizen, the investment must be financed by the buyer from funds located outside Mauritius and transferred through a reputable bank listed in the Bank of Mauritius approved Banking Almanac.

A non-Mauritian citizen can take out a bank loan in Mauritian rupees provided that the first USD 500,000 (EUR 370,000) is paid in a convertible foreign currency and the loan repayment is made in a convertible foreign currency.

In the case of a purchase by a foreign citizen, the following documents must be provided:

Property Development Scheme (PDS) 

Upon purchase of a property under the PDS scheme, you will be eligible for a residence permit if you have invested USD 375,000 or more or the equivalent in another freely convertible currency. 

The IRS and RES real estate programs are being replaced by the PDS or Property Development Scheme to allow new luxury real estate developments for sale to foreign nationals. 

All units can be acquired by foreigners wishing to invest in Mauritius in an environment-friendly setting where the ecological aspect is paramount.

Launched in 2015, this program is oriented around flexibility, localized social and economic contribution, and respect for the environment. A project meets the PDS standards when it has a minimum of 6 residential properties of high standing. The surface area of a plot of land for the construction of a villa, it is 5,275 m²

The Property Development Scheme (PDS) is designed for: 

The projects developed under this program are built on land of all sizes, up to 20 hectares. They are luxury residential properties sold exclusively on a VEFA basis but with no minimum purchase price, meeting high international standards. Owners enjoy open spaces, high-level leisure and recreation facilities, and daily management services.

By investing more than USD 375,000 in a PDS project, the non-citizen, his/her spouse and children under 24 years of age, are granted a residence permit as long as the purchaser holds the residential property. Finally, a non-resident holding a residence permit under the SDP is exempted from an occupation or work permit to invest and work in Mauritius.

Advantages of the PDS scheme in Mauritius

Upon purchase of a villa under the PDS scheme, you will be eligible for a residence permit if you have invested more than USD 375,000 or the equivalent in another freely convertible currency. This residency permit is valid as long as you retain ownership of the property. It allows you to benefit from the particularly favorable tax policy if you stay more than 183 days per year in Mauritius while being valid for your immediate family members (spouse and children up to the age of 24). 

Registration fees under the PDS are harmonized at a single rate of 5%. The conversion tax is not applicable on 9-hole golf courses. You have the option of renting your property through a reputable real estate agency, which will find tenants and manage your property in your absence for the whole year or part of it.

Whether you are an individual or a business, with the PDSyou benefit from the flat and advantageous 15% tax rate for businesses and individuals, as well as a registration fee of only 5% on real estate transactions. There is no capital gains tax on the sale of the property and no withholding tax on interest and dividends.

You will benefit from duty exemptions on equipment and the free repatriation of profits, dividends and capital. For French buyers, this investment is not included in the calculation of the wealth tax (ISF) and there is no generalized social contribution (CSG), property tax or housing tax. Due to the double taxation agreement with France, if the income comes from the rental of real estate, it will only be taxed in Mauritius at 15%.

Who can be interested?

Are eligible to purchase a residential property PDS:

Formalities to be completed to purchase PDS property in Mauritius

There are 3 cases: purchase of a PDS property by an individual; purchase of a PDS property by a company; purchase of a commercial PDS property by a company.

Purchase of a PDS property by an individual

The application to purchase a PDS property must be submitted to the EDB by a company that specializes in the PDS program. This company will carry out the Know Your Client (KYC) exercise and open an Escrow Account in your name. The application must be made online through the Property Acquisition and Management System. A non-refundable fee of Rs 20,000, payable by cheque, is applied to each application.

As an individual buyer, the following documents are required:  

If you wish to apply for permanent residency, you will also need to produce the following documents:

Purchase of a PDS property by a company

In the case of a company wishing to purchase a property under the PDS program, an application must be made to the EDB for authorization. The following documents must be submitted: 

All the above-mentioned documents in the case of foreign nationals applying for a resident permit accompanied by their dependents.

Purchase of a commercial PDS property by a company

Foreign nationals who are not registered with the EDB can acquire commercial space in a building to develop their business, including a shopping mall, office building or warehouse, or even under the PDS or Smart City Scheme. For this, an application must be made to the EDB for a permit. 

Documents to be submitted: 

Payment schedule for a real estate purchase under an PDS project

The reservation contract must be made by a notary and once the application to the EDB has been approved, the deed of sale can be signed and registered.

When the acquisition of a PDS property is done on plan or in the construction phase, the contract is governed by the provisions of a sale in future state of completion (VEFA) or a forward sale, as the case may be, in accordance with the provisions of articles 1601-1 to 1601-45 of the Mauritius Civil Code.

The payment schedule of a property in PDS is similar to that in VEFA :

Residence Permit for property investors in Mauritius

It should be noted that to obtain a residence permit through the acquisition of a real estate residence, a minimum of USD 375,000 is required. The purchaser and his family members (spouse and children under 24 years of age) become eligible for the Mauritian residence permit, which is valid for the entire period of ownership of the property.

Good to know:

Owners of real estate in IRS/RES/PDS can rent out their property, become tax residents in Mauritius and are not subject to any restrictions on repatriation of funds or income from the sale or rental of the property. 

Non-citizens holding a residence permit under the IRS/RES/PDS are exempt from the Occupation Permit or Work Permit to invest and work in Mauritius.

Turning your Mauritian house into a home

When relocating to Mauritius, you probably left behind some of the things that made your house a home. To make this new life as sweet and pleasant as possible, the island has no shortage of shops specially dedicated to furnishing, DIY, decoration, etc., such as Macumba Ltd, Espace Maison et Jardin, Teak World, Mr Bricolage, La Foir'Fouille, Roche Bobois and Moodesign. If you want to remain eco-friendly while furnishing and decorating your home, The Good Shop is a collaborative initiative, particularly oriented towards the circular economy. Three shops have opened so far, in Calebasses, Curepipe and Moka, respectively.

In Mauritius, it is also common to have your furniture made by local cabinet makers. Ask around or visit the Mauritius forum for information and tips!

Note that most furniture stores offer free delivery and assemble the furniture for you. To take advantage of this, just ask when you visit the store. 

Regarding the prices of products in store, most of them being imported, the prices can be slightly higher than in Europe, for example.

Units of measurement in Mauritius

Mauritians rarely speak in square meters. Thus, you will probably hear about square feet, perch and toise:

Useful links:

L'Express Property  

Directory of real estate professionals in Mauritius

Article written by expat.com
Last update on 22 March 2023 14:51:01
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