It has taken almost six months, but the Mauritian government has now finally amended the island’s Non-Citizens (Property Restriction) Act to make it possible for property investors from SA – and elsewhere – to buy apartments outside of the IRS, RES and PDS developments that were specifically designated for foreign buyers.
In addition, the minimum investment amount has been dropped to MUR6-million (the equivalent of around R2,2m at current exchange rates.
Foreign buyers will still need to be registered with the Mauritian Board of Investment (BOI) and obtain a security clearance, notes Berry Everitt, MD of the Chas Everitt International property group, but after that they will be allowed to buy apartments in any building or development that is more than two storeys high (G+2) and not built on the “Pas Geometrique” (leasehold) land that makes up most of the island’s coastal front line.
“They will not need an occupation permit, residence permit, or permanent residence permit to buy an apartment – and in fact they will be allowed to acquire several apartments as buy-to-let investments if they wish and rent them out to holidaymakers or longer-term tenants.
“This type of investment will not come with an automatic right of permanent residence in Mauritius, but it does open up a relatively inexpensive avenue of offshore diversification for South Africans, who have shown themselves to be very keen to own property on the island.
“In fact, our associates in Mauritius tell us that investor interest is already so high in the wake of the changes to the legislation that several new residential that were previously on hold for lack of buyers are now going ahead.”
The scale of demand, he says, is indicated by the fact that in the past year, SA investors and other foreign nationals spent the equivalent of more than R2,5bn on upmarket villas in the IRS, RES and PDS developments. “But the fact is that these schemes are too expensive for many would-be buyers, and there have been many calls in recent years to extend a previous but little-known facility that did allow certain non-residents who did hold an Occupation Permit to buy one apartment in a G+2 building, for their own use.
“This is effectively what has been achieved now, and Park Lane Properties, which is our Mauritian associate in the Leading Real Estate Companies of the World© (LeadingRE) network, is able to offer prospective investors an excellent selection of suitable apartments in desirable locations that not only offer excellent value but are also in high demand among both short-term and long-term tenants.
“These include units close to the beach in the most popular west and north coast holiday destinations, as well as city-centre apartments for business investors, at prices from the stipulated minimum of MUR6m.”
Everitt notes that Mauritian banks will make mortgage loans available to foreign investors, (currently at interest rates of between 7% and 9% in MUR), although the qualification criteria are stringent and borrowers are will usually be expected to finance at least 40% of the purchase price themselves. To this end, SA individuals over the age of 18 have a foreign investment allowance of R10m a year provided they have a tax clearance certificate from SARS and the transfer of funds is approved by the Reserve Bank.