Buy abroad: Mauritius, a high-end destination
Buy abroad: Mauritius, a high-end destination
By Jérôme Poirier – Le Monde – Posted on August 23, 2019
The sweetness of its taxation and the beauty of its beaches make this island of the Indian Ocean a destination of choice for French investors.
Dozens of zones for foreign property buyers have been created in Mauritius. In the north-east of the island, the seaside village Azuri offers villas and luxury apartments surrounded by beaches and a golf course. DR
500,000 US dollars, about 450,000 euros. This is the minimum amount that must be paid to become owner of a property in Mauritius to obtain a permanent residence permit. « It’s the easiest way to settle in Mauritius in a sustainable way », insists Joel Rault, former ambassador of the Republic of Mauritius in France, who now promotes his country to foreign investors. Attention, it is not about any good. Indeed, the law prohibits to buy directly a house to a particular Mauritian.
« In 2002, a law was passed allowing foreigners to become owners on the island, explains Outi de Falbaire, representative of the Barnes network in Mauritius. In order for Mauritians not to fall victim to real estate speculation, foreigners can only buy in certain very specific areas. »
Authorities supervise real estate programs where foreigners can buy. Only the labeled real estate complexes are accessible to them « IRS » (Integrated Resort Scheme) ou RES (Real Estate Scheme), which were grouped together in 2015 in a single system called « PSD » (Property Development Scheme). « IThese are new programs sold off plan, says Rault. These private complexes of 5 to 5,000 lots offer many integrated services to their residents: caretaking, swimming pool, maintenance of green spaces, golf … »
In Mauritius, one in three tourists and one in two real estate buyers are French. According to the Quai d’Orsay, 11,800 French would have settled there. Philippe Turpin / Photononstop
Most of these areas for foreign buyers have been created along the coast, but also inland instead of old sugar cane plantations. About a hundred real estate programs are currently under development in Mauritius.
Promoters, often former sugar cane growers, build residences for high-end clients. In addition to the sun all year long and the beauty of the lagoon, it is first attracted by a particularly lenient fiscal framework.
Single rate of 15%
If the amount of the property you buy exceeds $ 500,000 and you live in Mauritius for at least six months a year, you will obtain permanent resident status that allows you to benefit from the sweetness of local taxation. Indeed, all incomes, whatever their nature, are taxed at a single rate of 15%.
There is no capital gains tax on the resale of real estate, inheritance tax, property tax or housing tax, and the French-Mauritian tax avoid double taxation with their country of origin. Clarification: The permanent residence permit applies to the purchaser, his / her married spouse and children under 24 years of age.
If you buy in Mauritius but your investment is below the threshold of 500,000 euros, you can reside on the island up to six months in the year, but you will always depend on the French tax system. This lenient taxation explains in large part the love rating of the island with the French. « Here, one in three tourists and one in two real estate buyers are French, “Rault says. According to the Quai d’Orsay, 11,800 French would have settled there.
The city of Port Louis, capital of Mauritius, northwest of the island. Port Louis is known for its French colonial style architecture. Philippe Turpin / Photononstop
Model of political stability and respect for the rule of law in Africa, Mauritius became, fifty years after its independence, a kind of Luxembourg of Africa, registered by the European Union on the gray list of tax havens. But the tax is far from the only asset of this little paradise of the Indian Ocean, located west of Reunion.
In less than two decades, Mauritius has become a tourist destination of choice with the French, who particularly appreciate the low time difference (only two hours) with the metropolis. 65 km long and 45 km wide, the island covers an area of 2,000 km². Its volcanic origin explains the existence of a vast lagoon, which makes the happiness of the followers of the scuba diving. The favorite activity of retired tourists, who make up the bulk of investors, is rather golf, while the youngest prefer kite surfing, a hobby booming.
Aerial view of Grand Bay, north of the island. The price range is 300 000 euros for an apartment of 80-90 m² in the city up to fifteen million euros for the most luxurious goods. Atamu Rahi / Iconotec / Photononstop
The capital is Port Louis, in the northwest of the island. Mauritius has no official language, but French, taught at school, is spoken fluently by its 1.3 million inhabitants, while English is mainly the administrative language. Mauritian Creole is also spoken by the majority of the population, most Mauritians being either of Indian origin or of Creole origin, with a lot of miscegenation, as in Reunion.
The most developed tourist area is Grand Baie, north of the island. The price range is wide: 300 000 euros for an apartment of 80-90 m² in the city up to fifteen million euros for the most luxurious goods. A beautiful villa of 400 m² near the sea with garden and pool is worth about 750,000 euros. At least 100,000 euros must be added to have a view of the sea.
While most of the real estate complexes are located on the west coast (Tamarin, Le Morne, Rivière Noire …), several projects are being developed in the south-east, at the Pointe d’Esny, a preserved place which shelters some of the most beautiful beaches of the island. With construction starting in 2018, the first deliveries are expected in 2020.
« The Mauritian real estate market is still young; the first constructions for foreigners began seventeen years ago. Few still buy in the old “, explains Ms. de Falbaire.
Chamarel Falls, Mauritius. Model of political stability, this small country located 9000 kilometers from France became in fifty years a kind of « Luxembourg » of Africa. Peter Langer/Insight / Design Pics / Photononstop
Inherited from the Napoleonic Code, the Mauritian legal system is close to French law. The legal documents are written in French and you have to go before a notary to finalize a real estate transaction. The notary fees represent 1.5% of the amount of the acquisition, to which must be added 5% registration fees.
Namely: most foreigners who buy on the island do it on plan, on sale in the future state of completion (VEFA). As in France, there is a financial guarantee of completion and a ten-year guarantee that protect the purchaser in case of poor workmanship. It is nevertheless essential to ensure the financial strength and seriousness of the promoter before acting out. Another particularity of this market, there is no agency fees in the nine because the local real estate agencies are remunerated by the promoters.
Renting several months a year to make your investment profitable is relatively easy in Mauritius, where the climate is mild all year round. Especially as there are no restrictions on seasonal rentals.« Tourists are French, South African, British, Italian or Middle Eastern », précise Joël Rault. Prices have risen by an average of 5% per year over the last decade, so the average net profitability does not exceed 3% to 4%.
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