Mauritius is known for its turquoise waters, white sandy beaches and the hospitality of its inhabitants. And also for an attractive tax regime, even if some recent measures have slightly spoiled the picture. There you can buy an apartment from 150,000 euros for 150 m2 inside the country, and for those who can afford it, pay from 2 to 10 million euros for an elite residence on the coast. “You no longer need to perform a PCR test to go to Mauritius. The geopolitical situation is stable. There is only a two hour time difference with France and more than 150 kilometers of beach! “- boasts Simeng Gao, real estate consultant Mark Fuyols. “We see a lot of French entrepreneurs and young couples wanting to settle, especially near Grand Bay, the most developed tourist area in the north of the island,” she continues.
About ten years ago, the Mauritian government decided to encourage the arrival and settlement of foreigners by allowing them to invest in real estate. To prevent Mauritians from falling victim to speculation, the country has decided to regulate the flow of investment from international clients. Foreigners can buy only in certain very specific areas, and they have the right to access only the housing specified in the official “building schemes”. These are new programs sold according to plan. These private complexes include at least five lots with comprehensive services.
Non-local customers can also access smaller transactions called “R + 2”. These are small new condominiums on at least two levels. There are now about 120 housing projects, equivalent to about 1,000 lots.
“When Mauritius’ real estate market opened up to foreign investors in the 2000s, the programs focused on luxury real estate by the sea, and investment has become more democratic. The offer has expanded due to construction projects that have developed everywhere, inside and in the center of the island, “said Hirun Gurburrun, Counselor at the Mauritian Embassy and a member of the National Economic Development Agency of Mauritius (EDB). This government agency responsible for promoting investment on the island is preparing to launch a series of road shows to be held in France from 9 to 18 May (see box).
Less profitable investment in rent
“During the Covid crisis, the real estate sector did not fall. There were almost no cancellations of unscheduled sales. The promoters took the opportunity to rethink their projects, and virtual visits allowed them to continue their activities. Although there are many uncertainties due to the war in Ukraine and rapid inflation, there are encouraging signs. Says Hirun Gurburran. According to some developers, the number of transactions may return to the level of 2019 by October.
“The property is holding up well. During the crisis, prices did not fall, but the rental market is still falling as tourists become less. “, Emphasizes Simeng Gao, in Mark Fuzol. Rental income is slightly lower than in the past. Now they range from 2 to 3%.
“The real estate market is emerging from the great decline in which Covid’s first two years have plunged us around the world. In addition, restrictions on travel to Mauritius, which have long remained very strict in the destination country, have significantly limited the ability to buy or sell real estate. Travel resumes. In fact, the contacts, and therefore the search, began to grow again. notes Robert Ferra, a business lawyer with Legis and Partners Ltd in the capital of Port Louis, northwest of the island.
The former French colony, which also had to stop oil spills in 2020, has managed to overcome the crisis, even at the cost of high debt. “There was no shock thanks to the government’s measures, which for the first time saved the hotel and tourism sector, which almost stopped for 18 months. “, Said Robert Ferra. Assistance from the Mauritian state was mainly in the form of loans and very little in the form of grants.
However, Mauritius is not safe from the turbulence of the war in Ukraine. Inflation is largely imported there. The most pessimistic forecasts expect 6-8%, even up to 10% annual inflation. As elsewhere, prices for most consumer goods have risen as a result of the combined effects of inflation in Europe, global rising maritime costs, disrupting supply chains, sharp energy prices and the depreciation of the rupee against the dollar. that the authorities have been trying to fix since April.
The fall of the rupee
“The rupee was unscrewed during the health crisis before recovering a bit. This remains very interesting if you are buying a property for euros. Transactions can also be made in dollars. “- says Matilda Parent Lagesse, a business lawyer who lives in Tamaren-Riviere-Noire, in the west of the country. “Real estate is on the rise,” explains a lawyer who is involved in numerous real estate transactions and real estate programs.
Almost every second property buyer in Mauritius is a French citizen. French investors are well ahead of South Africans (20%) and the British (7.8%), according to the EDB. “The health crisis has made many French people want to find something else and space. In Mauritius, private schools offer large green spaces, and outdoor sports are available year-round. Detachment is quick as soon as you find yourself on the edge of a turquoise lagoon. The latest health restrictions, which are still in force in early May, are difficult to understand (wearing a mask on the street, a ban on more than 50 people, no sports). “Judge Robert Ferra.
Taxation remains favorable and the economic environment is very dynamic for entrepreneurs. “It’s very easy to start a company on the spot,” explains Matilda Parent Lagesse.
The tax agreement between Mauritius and France allows French taxpayers to avoid double taxation. If you buy a property worth more than 340,000 euros, the owner will automatically receive a residence permit. And if he stays in Mauritius for at least 6 months a year, he will benefit from local taxation in terms of income tax. There is no residence tax, real estate tax or capital gains tax from the resale of real estate. Income tax and corporate income tax is 15%.
There is also no inheritance tax for direct heirs, provided that they also reside in Mauritius. According to the Franco-Mauritian tax agreement, real estate in Mauritius does not fall under the French real estate tax base (IFI). However, you will have to pay for real estate in France if the taxpayer’s assets exceed 1.3 million euros, even if you have the status of a tax resident of Mauritius.
New tax on dividends and CSG
“The country can no longer boast of easy and profitable taxation for individuals. The weight of income and expenditure taxation in general has increased significantly over the last 5 years. “, Hardens Robert Ferra. From July 2020, individuals whose net taxable income and dividends from sources in Mauritius exceed 3 million rupees, or about 67,000 euros per year, are subject to solidarity. The base refers to an excess of income of over 3 million rupees. This tax is limited to 10% of the amount of net income and dividends received by an individual.
“This increase in taxation has forced some of our customers to reconsider their business model and return to France. “- explains Catherine de Rosne, tax specialist and director of Legis and Partners Ltd. Moreover, two more events have recently taken place: one concerns the tax regime of dividends paid by Mauritian companies. These dividends are now included in the solidarity tax base, whereas they were previously exempt.
The second measure concerns social wage contributions, which also increased with the entry into force in September 2020 of the Law (generalized social contribution), which is equal to 9% of wages (3% paid by the employee and 6% paid by the employee). employer), instead of the fee, which was limited to 1791 rupees (40 euros).
Finally, unlike France, there are very few measures to reduce taxes, Mauritius law provides for only a few cuts without significant impact on the overall level of taxation and does not reduce taxes. What to remember before jumping into the water.
Good to know: inherited from Napoleon’s code, Mauritius’ legal system is close to French law. You will have to consult a notary to complete the real estate transaction.
Permission for a golden retirement
Mauritius intends to attract more and more foreign entrepreneurs, teleworkers, and foreign retirees who want to settle there. “We have a lot of requests from French people between the ages of 50 and 60 who want to buy real estate on the island to prepare for retirement,” said Simeng Gao, a consultant for Marc Foujols.
Administrative procedures are being facilitated. People over the age of 50 who are not working can obtain a residence permit for a pensioner. Originally issued for ten years, it can be renewed for another ten years with the possibility to apply for permanent residence for 20 years.
All you need to do is agree to transfer $ 1,500 a month, or a total of $ 18,000, to your Mauritian bank account each year. About 2,000 French retirees live in Mauritius.
Mauritius hosts a show
Marseille, Nice, Bordeaux, Lyon and Paris. Promoters of real estate investments in Mauritius are at the start of their tour of France. From May 9 to 18, about 140 sales representatives: government officials, developers, notaries, tax experts will take part in round tables and business meetings with investors.
Discussion menu: How to invest in real estate in Mauritius, how to become a resident, start a business or even retire in Mauritius. Individuals must register for these free events open to the public on decouvrirmaurice.com by May 8.