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How is the real estate market in Mauritius?



What is the post-covid situation of the real estate market in Mauritius?

After a long confinement and the closure of the borders, the real estate market has been impacted in Mauritius. There has been a marked interest in residential property among investors, who are aware of the importance of the place to live and the associated comfort. Despite the period of uncertainty, Mauritius remains a safe place for real estate investments. This security is reinforced by the measures taken by the Mauritian government to attract various foreign clients. Moreover, Mauritius remains undeniably the best destination of the African continent for investment, given the very diversified real estate stock and the numerous assets specific to its island living environment and its political, economic and financial stability.

Why is investing in real estate in Mauritius a good idea?

Mauritius has an extremely dynamic real estate market. If the years 2020-2021 remain an exception due to the crisis of covid-19, Mauritius attracts more and more foreign investors every year. Despite the crisis, real estate remains an active and stable investment sector for Mauritius, and remains an undeniable safe haven. If the urbanized landscape of Mauritius has been transformed for more than twenty years thanks to its new infrastructures, its new roads and modern buildings, we notice an increased trend of the rate of acquisition on the part of Mauritians and foreigners. This trend is slowly balancing the balance between supply and demand with the number of buyers approaching the number of properties available for purchase. The crisis of covid-19 has also allowed many investors and employees to understand that they can manage their business remotely thanks to the emergence of telecommuting, and have thus changed their priority in terms of living comfort.

However, the Mauritian real estate market has been stable for the last few years, with prices following the inflation. As a reminder, in 2022, a minimum investment of $375,000 is required to become the owner of an apartment in order to obtain a permanent residence permit on Mauritian soil. Acquiring a new apartment or villa starts in a price range from $220,000 to $370,000 depending on the location, amenities and other parameters. Then, depending on the type of property, its standing, its amenities and location, prices can soar as for any high-end destination.

Why real estate investment in Mauritius is a guarantee of safety?

If stock market investments can appear to be very fluctuating, especially following the Covid-19 crisis, real estate investments are more secure investments. Real estate has always been, and remains, the safe haven par excellence. The stock exchange depends on the economic health of a country contrary to the real estate which is, therefore, not affected by the economic downturn. Thus, we notice that a real estate property depreciates less easily over time.

Real estate constitutes a good income for rental income but also a more or less important capital gain at the time of the resale of a property according to the location of the property and its conveniences. There remains a personal reason, that of increasing one's wealth over the long term by using the inheritance.

Moreover, investments are regulated by the Mauritian law and its programs such as the PDS and SCS. Foreigners can only invest in certain areas. The Economic Development Board (EDB) regulates investment activities and provides information on the different modalities to carry out a transaction. Moreover, it adapts to the investor's profile and expectations. The real estate market oriented towards foreign clients was set up about twenty years ago, first with the IRS and then RES programs, which are now grouped under the PDS regime. In the meantime, the EDB has introduced the R+2 model and the Smart City Scheme (SCS). The sale before completion transactions or sale off-plan is offered for many properties under construction or in the form of a project. This specific regime has many advantages for the buyer who benefits from a financial security of completion and a ten-year guarantee in case of risk or defect. For more information on off-plans, this article lists all its advantages.

Finally, Mauritius has a significant tax advantage with its single tax rate of 15% that extends to all its income. The investor must make a purchase of more than $375,000 and stay on the island for a total of 6 months per year. It is estimated that the average profitability of real estate in Mauritius is 4% mainly due to the increase in prices of about 5% each year but also thanks to the absence of taxes on capital gains on resale or taxes on property and housing. To conclude, these numerous advantages allow the real estate market in Mauritius to remain strong.

Our BARNES Mauritius team, present on the whole island, is at your disposal for any information or for you during your real estate project. For any information, do not hesitate to contact us.