Budgetary exercise 2021-2022: new measures announced to support the real estate sector

On the 11th of June, the Mauritian government announced a series of new incentives to encourage Mauritian citizens and non-citizens to invest in real estate.

Whilst the borders are starting to re-open, Mauritius, like the rest of the world, is trying to find solutions in order to mitigate the impacts of the economic crisis in the current volatile covid situation. In that respect, the government has introduced a set of measures for this new fiscal year to revive its key economic sectors, including real estate.

Foreign market: investing in Mauritius remains attractive

During the previous fiscal year, a series of attractive measures which granted more rights to expatriates residing in Mauritius and to foreign investors had already been introduced. Amongst them, the Premium Visa which allows foreigners to settle in Mauritius for a period of one year, renewable on demand as well as the extension of the residence permit from 3 years to 10 years for self-employed entrepreneurs and investors.

It is also possible for a non-citizen holding an occupation or residence permit, to invest in serviced land within a Smart City project. Initially scheduled for a period of two years, this measure has just been renewed for two more years – until June 30, 2024.

These measures demonstrate the government’s interest in the development of these new urban areas, which aim to transform Mauritius positively. Smart Cities, like Beau Plan at the gateway to the North, aim to develop their region in a responsible and inclusive manner by diversifying the opportunities for its residents and for the neighbouring communities – particularly by providing employment prospects, by building good quality public infrastructure
which benefits everyone and by establishing a sustainable development plan of the territory.

Below is a summary of measures related to real estate which are important to highlight:

Value Added Tax Refund

Refund of VAT on construction of a house or residential apartment provided that :

• The cost of construction of a residence or the purchase price of the residence should not exceed Rs 3 million, up to a maximum of Rs 300,000.
• The household income eligibility threshold for the refund will be Rs 1 million per annum; and
• It is the first residence.

Home Ownership Refund Scheme

• If the property is sold within a period of one year from the date of the acquisition, the amount received under the scheme will have to be refunded.
• 5% of the cost of acquisition for a house, apartment, or land to build a residence to be refunded up to MUR 500,000 in the financial year 2021/2022. However, if the property is sold within a period of one year from the date of the acquisition, the amount received under the scheme will have to be refunded.
• 5% exemption on registration duty for first-time buyers on the first Rs 5 million of the acquisition value. This was previously restricted to property whose value did not exceed Rs 5 million.
• 5% of home loan to be refunded up to MUR 500,000.

FOREIGN REAL ESTATE

Sale of Land to a Non-Citizen

• Promoters under Smart City Scheme will be allowed to sell one plot of serviced land not exceeding 2,100 m2 to a non-citizen holder of Occupation Permits, Permanent Residence Permit, or a Residence Permit for another period of two years, that is, up to 30 June 2024 instead of 30 June 2022.
• Promoters under the Property Development Scheme (PDS) will be allowed to sell a plot of serviced land to a non-citizen holder of Occupation Permits, Permanent Residence Permit, or a Residence Permit provided that the  total area of all serviced land for sale does not exceed 25% of the area planned for construction of residential properties.

Amendments to the Non-Citizens (Property Restriction) Act

• The Non-Citizens (Property Restriction) Act will be amended so that no approval is needed from the Prime Ministers’ Office (PMO) for disposal of property under the EDB Schemes (e.g., Property Development Scheme, Integrated Resort Scheme, Business Purpose, Smart City and G+2) but only for EDB to inform the Prime Minister’s Office of such disposal.

BUSINESS FACILITATION

Occupation Permit (OP)

• A non-citizen will be entitled for an OP irrespective of visa category upon arrival (Waiver of business visa).
• Spouses of OP holders investing or working in Mauritius will be exempted from the occupation or work permit requirement
• Waiving of the maximum age limit of 24 years for dependents.
• Creation of a new category – the 10-Year Family Occupation Permit for those contributing USD 250,000 to the COVID-19 Projects Development Fund.
• Non-citizens holding an OP as self-employed will be allowed to incorporate a one-man company and employ administrative staff.
• Extension for Work Permit allowing non-citizen residents to bring foreign carers and maids to work in Mauritius.
• Economic Development Board (EDB) will set up a concierge service to enhance investor and retiree experience.
• Creating a privilege club scheme which would offer a range of incentives to OP holders and retirees (privilege access to hotels, golf courses, restaurants, private medical institutions, amongst others).
• The current paper-based Occupation Permit will be replaced by a Smart Card.
• Where an application for an Occupation Permit requires views and recommendations of a ministry or public sector agency, the latter will have a maximum of 5 working days to submit its views or recommendations to the EDB or else silent consent principle will apply.

Residence Permit

• Ground + 2 apartments – A non-citizen who purchases or acquires an apartment used, or available for use, as residence, in a building of at least 2 floors above ground floor will be issued with a residence permit, including for his dependents, and exempted from the requirement of a work or occupation permit provided the purchase price is not less than USD 375,000.

Permanent Residence Permit

• Holders of a 10-Year Permanent Residence Permit will have the validity automatically extended for a period of 20 years.
• Holders of a Permanent Residence Permit will be able to renew their permits and will be given the flexibility to switch category between investor, professional and retired.

Professionals (Foreign employees employed in Mauritius)

• Extension in validity of the Occupation Permit for Professional from 3 to 10 years.
• Flexibility to switch jobs for non–citizens holding an Occupation Permit as Professionals.
• The monthly salary applicable for an Occupation for professionals in financial services will be brought down to Rs 30,000 (limited only for fund accounting and compliance services by a company holding a license from the FSC, and the professional will need to have at least 3 years relevant work experience).

If you wish to learn more about the Smart City Scheme or find out about investment opportunities in Beau Plan and in the region, contact our sales team.