Love in a Warm Climate

14.03.17

With its tropical charms, stable economy and tax-friendly environment, it’s hardly surprising that the island of Mauritius holds increasing appeal for those seeking a luxury getaway. Gavin Strachan reports.

They hey may just be a few tiny specs in the middle of the Indian Ocean, but the bite-size island nation of Mauritius is still an international success story. From its status as a global business hub with a favourable fiscal regime and economic and political stability, to its well-established reputation as a top-tier holiday destination,  the tropical island is also  now increasingly being viewed by international  buyers as a desirable location for both permanent and part-time residence.

Since the early 2000s, when Mauritius first embarked on its initiative to convert former sugarcane land for residential tourism development, investment spinoffs for the local economy and its residents have been quick to evolve, and the island has never looked back.

In 2004, legislation was introduced to allow foreign ownership of residential property in terms of what is known as Integrated Resort Schemes (IRS) and subsequently Real Estate Schemes (RES), which enable overseas investors to own property on the island, thereby acquiring a residence permit with unrestricted access, as long as the property bought is at a value of at least US$500,000.

For local agent Kim Carlson, apart from building strong, new inward investment streams into a fledgling real estate market, both initiatives have been instrumental in encouraging overseas buyers to establish and register their businesses in Mauritius all the while helped by an investor-friendly, low tax base.

She explains: “Both schemes have proven popular with a wide-reaching HNW foreign buyer base. In the case of the IRS Scheme – Anahita the leading development on the island for this initiative, has set the bar high, offering a premium variety of freehold property located on six kilometres of shoreline. A further contributory factor to investor interest is the additional protection afforded to buyers of a completion guarantee provided by banks while their home is being built. Once the sales deed is signed, international buyers can apply for a residence permit and enjoy the benefits of residency from the outset. During    the development, payments are made in controlled stages; so from a cash flow point of view, payments are staggered over a 12 to 15 month period while the building is being completed. Peace of mind for the buyer is top priority.”

Acknowledged as an attractive environment in which to conduct business, Mauritius has no inheritance tax, no capital gains tax, tax free dividends and free repatriation of profits, dividends and capital. Double taxation agreements have also been concluded with over 34 countries, including France, the UK, India and China.

2017 it would seem, is shaping up to be a high- performance year too, with the Mauritian government expecting foreign direct investment (FDI) to increase in the region of 46% - feeding into the island’s aspirations  to become a high-income country by 2025, specifically defined as an economy with a gross national income per capita above $12,735 by 2025.

Adds Sachin Mohabeer of the Mauritius Board of Investment (BOI): “The island is gearing up for further consolidated growth with infrastructure upgrades evident across the board, putting an efficient public transport system in place and a recently refurbished international airport geared to manage the ever-increasing volume of air traffic. Real estate is a key component to this masterplan. Currently it attracts by far the largest share of FDI in the country, accounting for around 80% of the foreign investment received in 2016.”

Existing property investment schemes are also being fine-tuned as a means of streamlining the process of foreign ownership. As a first step - the Mauritian government has recently refined legislation under a new property development scheme (PDS), which aligns the tax treatment of former foreign property investment programmes IRS and RES.

Under the PDS programme, non-Mauritian citizens are eligible for a residency permit when they buy a property for more than $500,000 (R7.8m). Explains Deven Vyravene of Davyland Properties: “The conditions from the PDS will be similar to previous schemes. For example, residences need to be secured and the infrastructures as well as the integration of several services need to be introduced within the resort development area with amenities such as a gym, a spa, a club house, a commercial space or other services alike. Foreigners are only allowed to invest in dedicated, approved PDS developments. But once a foreign investor has obtained residency, they can apply for citizenship after two years.”

Among the first developments to be realised under the new PDS programme is St Antoine. Launched for sale off-plan by two of the island’s developers, Red4 and ENL Property, the development is every outdoor enthusiast’s dream destination. Situated on the pristine north coast, the new community includes access to two idyllic islands, Ile d’Ambre and Ile aux Bernaches, where residents can spend lazy beach days, explore the mangroves or picnic under the casuarina trees.

Adventures port enthusiasts are spoilt for choice as this unique area offers the opportunity to enjoy the best water activities, from snorkeling and fishing to kite surfing and sailing right on their doorstep.

Situated only 10 short minutes from the hub of Grand Baie, there is also easy access to everyday conveniences and comforts, including private schools and an array of shops, restaurants and bars.

Prices range from £490,000 for a 150 square metre two bedroom property, to £1.2m for a 240 square metre four bedroom penthouse with a private pool. Almost all of the apartments have sea views.

Adds Carlson: “Mauritius ticks a lot of boxes when it comes to buying property. Those looking for a change of lifestyle away from the hustle of the city, can put down permanent roots and enjoy quality time with their families and a solid return on their investment. As for those not yet able to make a complete break, there’s always a second home option, a haven to escape to as often as possible with good rental yields for the making in between visits.”

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