Buying Property in Mauritius as a Foreigner: PDS, Residency and Tax

Foreigners can buy property in Mauritius through specific investment schemes, most notably the Property Development Scheme (PDS), which allows for full freehold ownership. Buying a property valued at USD 375,000 or more automatically grants the owner, their spouse, and dependents a permanent residence permit for the duration of the ownership.

Key Takeaways

• Freehold Ownership: Non-citizens can own freehold property in designated schemes like PDS, Smart Cities, and Ground + 2 apartments.
• Residency Threshold: A minimum investment of USD 375,000 is required to obtain a permanent residence permit.
• Tax Efficiency: Mauritius offers a harmonised tax rate of 15% for individuals and corporations, with no capital gains or inheritance tax.
• Security of Title: Buying property is governed by the French-based 'Code Civil Mauricien', providing strong legal protection for buyers.
• Ease of Process: Acquisition permits are managed by the Economic Development Board (EDB) of Mauritius.

Is it possible for any foreigner to buy property in Mauritius?

Yes, international buyers have been able to purchase property in Mauritius since the early 2000s. Originally, the market was governed by the Integrated Resort Scheme (IRS) and the Real Estate Scheme (RES). These have since been consolidated into the Property Development Scheme (PDS).

Under the PDS, there are no restrictions on the nationality of the buyer. Whether you are an individual, a company, a trust, or a foundation, you can acquire residential property. The only caveat is that the development must be registered with the Economic Development Board. This ensures that the infrastructure, environmental standards, and legal compliance meet national requirements.

What are the different investment schemes available?

Navigating the Mauritian property market requires an understanding of the specific frameworks designed for foreign participation. Each serves a slightly different lifestyle or investment purpose.

The Property Development Scheme (PDS)

The PDS replaced the IRS and RES in 2015. It is designed for the development of a mix of residences for sale to non-citizens, citizens, and the Mauritian Diaspora. PDS projects often include high-end amenities such as security, health clubs, and property management services. There is no minimum price for purchase under the PDS, however, the USD 375,000 threshold remains for residency purposes.

The Smart City Scheme

Smart Cities are large-scale, mixed-use developments that integrate office space, residential units, and leisure facilities. They are designed to be sustainable, technology-driven hubs. Foreigners can purchase villas, townhouses, or apartments within these zones. Notably, foreigners with a residence permit (even if not linked to property purchase) can buy serviced land within a Smart City to build their own home, provided the construction is completed within five years.

Ground + 2 (G+2) Apartments

Under the Non-Citizens (Property Restriction) Act, foreigners can buy apartments in buildings that consist of at least two floors above the ground floor. The purchase price must be at least MUR 6 million (approximately USD 135,000, depending on exchange rates). While this does not grant permanent residency, it allows for a formal entry into the Mauritian real estate market at a lower capital outlay.

Can property investment lead to residency?

For many high-net-worth individuals, the primary driver for buying property in Mauritius is the linked residency benefit. On 10 June 2020, the Mauritian government lowered the residency threshold from USD 500,000 to USD 375,000.

When a non-citizen acquires property for this amount or more under an approved scheme, they are eligible for a Permanent Residence Permit (PRP). This permit remains valid as long as the buyer retains ownership of the property. This right extends to the spouse, children (no age limit, provided they are dependents), and even parents of the permit holder.

Comparison of Overseas Property Schemes

What are the tax implications of owning property in Mauritius?

Mauritius is frequently cited as a tax-neutral or tax-friendly jurisdiction. For foreign owners, the fiscal landscape is remarkably simple compared to European or North American systems.

1. Income Tax: If you rent out your property, the rental income is taxed at a flat rate of 15%.
2. No Capital Gains Tax: If you sell your property for a profit after a few years, the entire gain is yours to keep. There is no tax on the disposal of immovable property.
3. No Inheritance Tax: Property held in Mauritius can be passed to heirs without any succession duties or death taxes.
4. No Property Tax: There are no annual council or land taxes, though there is a small annual "General Rates" fee in some urban municipal areas.

Furthermore, Mauritius has a vast network of Double Taxation Avoidance Agreements (DTAAs) with dozens of countries, ensuring that you are not taxed twice on the same income.

What is the step-by-step process for buying property?

The process is highly regulated and follows a structured legal path to ensure buyer protection.

Step 1: Reservation

Once a property is selected, the buyer signs a 'Contrat de Réservation Préliminaire' (CRP). This document outlines the price and specifications. At this stage, a deposit (usually 5% to 10%) is paid into a supervised escrow account held by a public notary.

Step 2: EDB Application

The developer or the buyer's legal representative submits an application to the Economic Development Board. This involves a 'Know Your Customer' (KYC) check and a request for an acquisition permit. This process typically takes three to six weeks.

Step 3: The Deed of Sale

Once the EDB approves the purchase, the final Deed of Sale is drafted by a Notary. Under Mauritian law, the Notary acts as an impartial officer of the state, ensuring that the title is clear and that all taxes are paid. If the property is being bought 'off-plan' (Vente en l'État Futur d'Achèvement, or VEFA), the payments are made in stages as construction progresses.

Step 4: Registration

The Notary registers the deed with the Registrar General. At this point, a 5% Land Transfer Tax (for the seller) and a 5% Registration Duty (for the buyer) are typically paid, unless the project has specific exemptions.

Are there additional costs for the buyer?

Beyond the purchase price, buyers should budget for the following:

• Registration Duty: 5% of the property value.
• Notary Fees: Scaled according to the property value, usually ranging from 0.5% to 2% plus VAT.
• Agency Fees: If using a buyer's agent, this is typically 2% plus VAT.
• Processing Fees: Small administrative fees payable to the EDB.

Why choose Mauritius over other jurisdictions?

Mauritius consistently ranks as the best place to do business in Africa according to the World Bank. Beyond the financial incentives, it offers a high standard of living, political stability, and a hybrid legal system that combines elements of British Common Law and the French Napoleonic Code.

For South African, European, and Middle Eastern investors, the time zone (GMT+4) is advantageous for remote work. The island also boasts world-class medical facilities and international schools, making it more than just a holiday destination, but a viable long-term home.

Frequently Asked Questions

Can I buy property in my own name? Yes, an individual can buy property in their own name. Alternatively, you can buy through a Mauritian company, a foreign company, or a Trust, provided the EDB approves the structure.

Is the property freehold or leasehold? Most property sold under the PDS and G+2 schemes is freehold. However, some beachfront properties (Pas Géométriques land) are held on long-term government leases, usually for 60 to 99 years. It is vital to check the title status before signing.

Can I finance the purchase with a local bank? Yes, Mauritian banks like MCB or SBM offer mortgages to non-citizens. Typically, banks require a 30% to 40% deposit from foreign buyers and the loan term usually ends by the age of 60 or 65.

What happens if the developer fails to finish the project? Properties sold under the VEFA (off-plan) system are required by law to have a 'Garantie d'Achèvement' (GFA). This is a bank guarantee that ensures the project will be completed even if the developer faces financial insolvency.

Can I rent out my property when I am not there? Yes, there are no restrictions on renting out your property. Many PDS developments offer an integrated rental pool or property management service to handle short-term or long-term holiday lets.

Disclaimer: This article is intended for informational purposes only and does not constitute legal, financial, or tax advice. Readers should consult with a qualified professional advisor before making any investment decisions in Mauritius.

Sources: Economic Development Board (EDB) Mauritius, Mauritius Revenue Authority (MRA), and the Non-Citizens (Property Restriction) Act.