In a bid to increase foreign and local investment in the real estate market, the government of Mauritius introduced the Integrated Resort Scheme (IRS) in 2002, and the Real Estate Scheme (RES) in 2008. Both property schemes were replaced in 2015 by the Property Development Scheme, making it easier for non-citizens to buy property in Mauritius. The PDS differs from the IRS and RES in that it no longer differentiates between small and large landowners. Registration duty under the PDS is a single rate of 5% and the PDS focus is on developing luxurious residential units for foreigners, that would produce social benefits for local communities.
Features of the PDS
The main features of the PDS are the development of high-end luxurious residential units on freehold land of no less than 0.4220 hectare (1 arpent). The development must include well-designed public spaces that encourage social interaction and a sense of community, as well as quality leisure and commercial activities and infrastructure that enhance the residential properties. Services such as security, maintenance, gardening, wastewater treatment and household waste collection must all be provided for, and each residential unit must make a contribution to a social fund in order to finance specific local community activities and programs. A PDS project must include a minimum of 6 residential units, which can be a mix of luxury villas, apartments, penthouses or similar high-end residential units with the services and amenities specified under the scheme.
The many advantages of scheme and investing in Mauritius
There are many great reasons to invest in Mauritius under the Property Development Scheme. If your property has a value of USD 500,000 or more, you are automatically eligible for a Residence Permit, as are your spouse, and children under 24 years of age. As a resident you are free to come and go as you please (although, to be considered a ‘tax resident’ for tax purposes, you need to be in Mauritius for a minimum of 183 days per calendar year).
You also have the option of letting your property using a number of reputable real estate agents, who will find tenants and manage the rental of your property while you are away, whether for the whole year, or part thereof.
You also benefit from the favourable 15% flat rate of tax rate for both companies and individuals, as well as a registration fee of just 5% on real estate transactions. There is no tax on capital gains if the property is sold, no withholding taxes on interest and dividends, exemption from customs duties on equipment and free repatriation of profits, dividends and capital.
For French buyers, their investment is not included in the wealth tax calculation (ISF) and there is no general social contribution (CSG), property or housing tax. Due to the double taxation treaty agreement with France, should income be generated from property rental, this will be taxed in Mauritius at just 15%.
It all makes perfect sense!
Add to that a stable political climate, a consistently strong growth in Gross Domestic Product (GDP) year after year, an ideal location with great weather, and an island lifestyle with all the benefits of luxurious residential properties, and it’s not difficult to see why investing in residential property in Mauritius has never been so attractive.