With its pristine beaches, brilliant blue waters, and lush landscapes, Mauritius has long captivated the hearts of international buyers seeking investment opportunities in a tropical haven. But beyond its undeniable beauty, Mauritius offers a robust legal framework and a welcoming environment for real estate investment. This article will help explain the legalities of property ownership in Mauritius, highlighting recent changes, government incentives, and the advantages that await discerning investors in 2024.
A transparent and secure legal framework
Mauritius boasts a well-established legal system based on British common law, ensuring transparency and security for property transactions. The Mauritian Constitution guarantees the right to own property, providing peace of mind for foreign investors.
Company shares and property ownership: If you’re considering acquiring property through a company structure, an additional factor is registration duty on share transfers. Here’s the critical point about shares in companies not listed on the Stock Exchange or secondary market: If the company you’re investing in owns immovable property (land and buildings), any transfer of shares in that company may be subject to registration duty.
This emphasises the importance of due diligence when considering this investment approach. Seeking guidance from a lawyer or a knowledgeable property developer can help you navigate these legalities and ensure a smooth transaction.
Investment-friendly updates to property laws (2023)
The Mauritian government is actively seeking to attract foreign investment in real estate. Here are some key updates implemented in 2023 that benefit investors:
Increased minimum investment for non-citizens outside specific schemes: Previously, the minimum investment for non-citizens to purchase property outside designated schemes (like Smart Cities or PDS) was USD 350,000. This has been raised to USD 500,000 in 2023. However, the privilege has been extended to primary holders of resident or occupation permits, allowing them to invest in one property exceeding USD 500,000 and not exceeding 1.25 acres, excluding state land.
Introduction of the Sustainable City Scheme: This new scheme offers residency permits to non-citizens who invest a minimum of USD 375,000 in a residential property within a designated Sustainable City project. The residency status remains valid as long as the investor holds the property.
Government incentives to attract investors
The Mauritian government actively encourages foreign investment through a variety of attractive incentives.
Tax Benefits
Mauritius offers a competitive tax regime for property investors. The island government has a double taxation agreement with more than 40 countries, including France.
Individuals and businesses are taxed at 15%.
There is no housing or property tax in Mauritius. However, a land transfer tax, known as the BOI tax, is imposed at 5% of the property’s sale value at the time of purchase.
Moreover, there is no capital gains tax on property sales (except for companies purchasing property for resale) and no inheritance tax.
Residency Programmes
Several residency programmes are available. Learn more about the Permanent Residence Permit, Family Occupation Permit, and Premium Visa, among others. The government has incentivised people to live, work, play, and retire in Mauritius. All the information is available on the Economic Development Board (EDB) Mauritius website.
Ease of Doing Business
Mauritius consistently ranks high in the World Bank’s Ease of Doing Business Index, facilitating property acquisition and business establishment.
What you need to know about buying property in Mauritius
Properties are sold and transferred to purchasers under the VEFA (vente en l’état futur d’achèvement) system. This allows investors to buy property that is either yet to be built or still under construction. Under VEFA, the seller or developer commits to delivering the property to the buyer once construction is complete. The VEFA is a notarial deed of sale that the buyer must sign or an authorised representative with power of attorney in the presence of the project’s notary in Mauritius. If the buyer cannot be in Mauritius, 2Futures can assist with this process. A notary fee of 1% plus VAT applies.
Owners can sell their property at any stage during the construction process.
The entity must be registered on the island to purchase residential property via a trust in Mauritius. Both noncitizens and residents of Mauritius can establish a trust for this purpose.
The following people and entities may buy property in Mauritius:
- A natural person, whether a citizen of Mauritius, a noncitizen or a member of the Mauritian diaspora
- A company incorporated or registered under the Companies Act
- A société, where its deed of formation is deposited with the Registrar of Companies
- A limited partnership under the Limited Partnerships Act
- A trust, where a qualified trustee provides the trusteeship services
- A foundation under the Foundations Act.
Note: A qualified global business, as defined under the Financial Services Act 2007, holding a Global Business Licence, may acquire property under the PDS.
Investing in paradise: your next step
Mauritius presents an exceptional opportunity for savvy real estate investors with its stunning natural beauty, stable legal framework, and attractive government incentives. Whether you seek a luxurious beachfront villa, a charming colonial home, or an investment property with strong rental potential, Mauritius offers something for everyone.
As a leading property developer in Mauritius, we are committed to providing you with the most up-to-date information and guidance throughout your investment journey.
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