Patricia Piper Properties ltd

Mauritius and Seychelles are among the 10 most wanted Holiday Home Locations.

Download the article [click here]

More to riches in Mauritius
Zweli Mokgata     Published:May 05, 2008

ON COURSE: The Bel Ombre development in Mauritius offers attractive extras for those in the market

Villas overlooking the ocean and two golf courses are available for a bargain

Permanent residence, relaxed taxes free with your house

South African property investors can sidestep heavy local taxes by investing in holiday homes in Mauritius, and gain the added bonus of permanent residency.

A Mauritian property development in Bel Ombre, is promising real estate investors 288 villas overlooking the ocean and two golf courses in the Domaine de Bel Ombre region for a bargain. [see our IRS map locator]

The initiative falls under the Mauritian government’s integrated resort scheme which was launched in 2002.

Under the scheme , only purchases of more than 500 000 (R3.9-million) are permitted .

Hector Espitalier-Noel, chairman of Bel Ombre Sugar Estate, said: “The economy of Mauritius was mainly driven by the production of sugar, but when sugar prices began to drop over the years, alternative industries had to be developed.

“The government chose financial services and the textiles industry, but these began shrinking and the focus became tourism.”

Until 2002, Mauritius did not allow foreign investors to buy property .

The opening up of the property market to foreigners was part of the plan to stimulate tourism and bring in foreign investment.

Because of the skills shortage for developments, Bel Ombre has partnered with several South African contractors including engineers, interior designers, landscapers, IT technicians (to install a fibre-optic network on the estate) and quantity surveyors.

The units are aimed at the upper end of the market with prices ranging from 800000 to 1.2-million.

However, investors with limited funds can make shared purchases where they are allocated a certain number of weeks in the year to use the villas as they wish, including renting them out.

“The tourism boom and the success of the IRS project has led to a surge in the construction industry,” Espitalier-Noel said.

Alec Bates, director of the Secondlifestyle group, said: "As Mauritius is part of SADC, buyers with South African Reserve Bank Approval can utilise the SADC property investment allowance to purchase a holiday home in Mauritius.

"This allowance is granted in addition to the R2 million Foreign Investment allowance, which maybe still used to invest in other investment opportunities outside of South Africa”

Mauritius alone is expecting 980000 tourists to hit its shores this year. The country estimates that it will have 2-million annual visitors by 2015.

Buyers also gain permanent residency and can take advantage of the country’s relaxed tax laws. There is no capital gains tax or succession tax in the country.

Property in Mauritius: African dish with French dressing

Last Updated: 12:01am GMT 24/11/2007
Page 1 of 2

Who needs the Caribbean when you can buy in Mauritius? Finally, this lush island is opening its doors to foreigners. Clive Aslet reports

Sipping a glass of vanilla-flavoured rum in the bar of Le Telfair hotel in Mauritius, I am beginning to feel a little envious of my companion. Maurice Planel is a local, one of the French-speaking ascendancy who, after nearly 40 years of independence from Britain, still controls most of the island's assets.
Le Telfair resort
Fair enough: Le Telfair resort has a hotel, apartments, golf and a spa - plus a slice of Mauritius beach

It isn't the sunshine, filtering in through Colonial-style verandahs, or the palm-fringed sandy beaches. It isn't the volcanic landscape, which has thrown up mountains such as the Trois Mammelles (three breasts - you can tell the island was French for most of the 18th century). It isn't even the food, although -part of the French legacy again - this is as celestial as the year-round temperature, 30C in January dipping to a low of 24C in July. It's the colonial lifestyle.

"We all have three maids in our homes," says Planel, "so that breakfast is always ready when you come down in the morning. And a driver, of course." Of course. I sigh. Life just isn't fair.

For decades, Mauritians kept their 780 square miles of tropical beauty off the coast of Africa strictly to themselves. Foreigners were not allowed to buy property. The revenue from sugar meant that the island could mind its own business, opening the occasional luxury hotel.

Then, when the EU decided to end the special trading status accorded to former colonies, Mauritius had to rethink its future. Five years ago, the government introduced a scheme whereby former sugar estates could develop luxury packages for foreign buyers. Now the first of these developments, known as Integrated Resort Schemes (IRS), are just coming on to the market. Most have the advantage of being priced in US dollars.

Affluent villa owners will spend their holidays on Mauritius, spurning the charms of other exotic destinations such as the Seychelles, the Maldives or the Caribbean.

(...)

Coming relatively late to the villa game, Mauritius has learnt from the mistakes of others. It is making its pitch to an affluent set, who will put money into the economy. IRS buyers won't find themselves exactly on their own, but the island hasn't been overrun by tourists, nor will it be. Little on Mauritius comes cheap (unless you have access to the garment factories that make clothes for Bond Street labels).
(...)

With ownership comes residency. With no capital gains tax, no inheritance tax and an income tax rate of 15 per cent, this is not to be sneezed at. Although too few villas have as yet been built to test their investment potential, Andre Bonieux, a partner at Pricewaterhouse Coopers, expects "the market to be quite dynamic going forwards".

(...)

Raju Jaddoo, managing director of the Mauritius Board of Investment, does not expect an unlimited number to be built. "The most important thing in Mauritius is that we want to keep a very good balance between the environment and property development. Based on projects approved by the Board of Development, we don't foresee more than 4,000 villas offered under the IRS scheme."

The IRS concept develops the global trend for luxury hotels to develop associated villa complexes. These villas can be bought for personal use and investment. They are managed by the hotel, but owners can take advantage of golf courses, restaurants and spas, and get an income from letting them when they are not occupying them themselves. Some IRS schemes are based on clubs rather than hotels, but all will be supported by a high level of service. "The combination of an emerging property market for foreigners with an established tourist base must be a winner," says Sarah May-Brown of Knight Frank. There are direct flights from the UK with British Airways, Air France and Air Mauritius.

One website quotes Mark Twain as saying: "You gather the idea that Mauritius was made first and then heaven, and that heaven was copied after Mauritius."

Pedantically, I have to point out that the sentence should begin with the words "From one citizen". (Twain also reported the comment that Curepipe is the "wettest and rainiest place in the world".) But goodness, I wouldn't quibble. Mauritius is indeed a heavenly island. When you have tired of the watersports and golf, you can go racing, look for dodos (they used to live on Mauritius) and admire the cascades. We found the people universally charming and friendly. Their different ethnic backgrounds are reflected in the villages - each one has its Hindu temple, Mosque and Roman Catholic church. But it is a stable society.

On the plane home, I sat next to a gun runner, who had lived happily in a variety of African hotspots before settling on Mauritius. His friend had bought a villa off-plan, and turned a profit of €150,000 by selling it on again three months later. Even an earthly paradise has its value. And that of Mauritius would seem to be going up.

Fancy a pad in paradise?

By Sharmila Devi

Published: March 12 2008 02:00 | Last updated: March 12 2008 02:00

Mauritius is putting the rich first when it comes to expanding the tourism and hospitality sectors in a strategy that focuses on exclusivity.

But to offset criticism in a country where the gross domestic product per capita is below $7,000, the government is also promoting training and social programmes with the help of international developers to provide more than just low-grade work.

To boost international real estate interest, there is the integrated resort scheme (IRS), allowing foreigners to obtain residency if they spend a minimum $500,000 on a property at several developments under way across the island. Incentives are also offered to encourage construction in sectors including offices to hospitals to biotech.

"We want the local community fully integrated with these developments," says Rama Sithanen, deputy prime minister and finance minister. "We are encouraging outsourcing to SMEs, talking with fishermen and planters and helping with training and economic empowerment."

The IRS was born about five years ago, allowing former sugar estates to convert into luxury resorts with hotels, spas, golf courses and other leisure amenities along with residential villas and properties sold for between $1m and $4m. Mauritius ended its restrictions on property purchases by foreigners and streamlined residency, tax, work and other bureaucratic legislation.

"Apart from being a beautiful place, Mauritius is friendly and offers safety, democracy and the rule of law," says Xavier Luc Duval, tourism minister. "Coupled with the growth in tourism, the IRS offers good investment and rental prospects."

The Board of Investment has approved 10 projects, representing about 3,500 units. High prices and careful approvals are intended to prevent any flooding of the market.

"We are promoting aesthetic beauty while at the same time retaining our cachet and reputation for hospitality," says Raju Jaddoo, managing director. He says the government will make about 25 per cent from the sale of each villa, mostly from the developer. "The government will get between $150,000 and $200,000 straight away and paid at source." This includes land transfer and registration costs.

Buyers and developers are enticed by Mauritius's flat 15 per cent tax rate and no capital, inheritance or withholding taxes. The downside is that some facilities, such as shops nearby, have yet to be developed.

The developer must also provide an environmental and social impact study and pay about $6,000 per villa into a social fund. This money can be held in an account controlled by the developer but must be spent in accordance with the study and under scrutiny from outside auditors.

"If the money was transferred to the government, then all sorts of rules to do with things like procurement would have to come in," says Mr Jaddoo.

Anton de Waal, chief executive officer of the Villas V. resort that is under construction, says its social fund has four pillars: to raise awareness; employment and training; infrastructure such as water provision; and a venture capital fund to boost entrepreneurship in fields such as arts and crafts.

Property buyers are mostly from Europe but also from South Africa, India, Russia, Australia, the United Arab Emirates and the US and appear to be hooked by the resorts' exclusivity and modern-colonial design.

"It's a lengthy process and some people even spoke of invasion of privacy, but I don't agree," he says. "Financial intelligence and controls are needed and there's no way round that."

Local Mauritians keen to develop small plots of land but with few other resources are being encouraged under the Real Estate Scheme run by the Board of Investment. Sellers are put in touch with developers and potential buyers include diaspora Mauritians and foreigners who wish to buy for residential or business purposes.

"This is more suited to professionals rather than people in the luxury market and we wanted to give opportunities to people in Mauritius to leverage their land," says Mr Jaddu. "Lots of Mauritians have made money in the UK property market, for example, and we want to encourage them to come and give us a helping hand."