The Indian Ocean island of Mauritius, a 12-hour flight from London, is one of the newer property markets on the block. Buying a home there as a foreigner was impossible until 2002, and opportunities for buyers remain limited.
But the island’s business-minded government, a favourable tax regime and impressive new developments in the pipeline mean many house-hunters may be lured to Mauritius from established upmarket destinations such as the Caribbean.
Easy to do business
Mauritius, which has 20 five-star hotels set along more than 200 miles of golden coastline, is an exotic kaleidoscope of French, British, Indian and Creole influence. You see it in the food, where curry and haute cuisine happily co-exist, and in the warm, culturally mixed people.
Crime is low, and unlike parts of the Caribbean, it’s easy to do transactions: Mauritius came 17th in a recent World Bank poll of 183 countries for ease of doing business. Since being granted independence from Britain in 1968, successive governments have replaced dwindling sugar production with off-shore banking, textiles, IT and tourism as income-earners for the island.
“We’re very much export-focused with liberal trade laws, well capitalised banks and regulated property laws,” says Ragu Jadoo, head of the Board of Investment. “Property development is a natural fit in an economy that’s diversifying.”
The Integrated Resort Scheme (IRS) introduced in 2002 allows foreigners spending a minimum of £300,700 to buy homes on pre-approved resorts. In return they receive Mauritian residency and can benefit from the island’s low-tax regime.
The first IRS project launched in 2006. Tamarina on the west coast has 119 villas based around a golf course. This sold well, with some early buyers doubling their money on sales.
Another, Villas Valriche, on the sheltered and undeveloped south coast, 45 minutes from the airport, has just handed over its first villa. The 525-acre site, which was once part of the Bel Ombre Sugar Estate, faces the sea at the foot of the lush Valriche Nature Reserve and includes an established championship golf course.
The beach club is 10 minutes away by golf buggy and owners receive a discount on facilities at the two nearby hotels on the former plantation. The freehold two- to four-bedroom villas are well spaced with generous terraces, pools and built-in barbecues. Prices start from £637,500, rising to £800,450 for larger houses. To date, 100 of the 288 planned homes have been sold to a mix of South African, British and French buyers.
The rentals at Villas Valriche are managed by Veranda Resorts, with a four-bedroom villa costing £770 a night, but in a destination best known for its top-end hotels can owners expect a reasonable rental return?
“Mauritian hotels have high annual occupancy of 77 per cent but they are expensive,” says Anton de Waal, CEO of Villas Valriche. “Renting a villa provides better value and more privacy. With Johannesburg four hours away, the main rental market will be South Africans who are used to renting. Europeans love this island and there’s plenty to do including golf, tennis and watersports.”
More for foreigners
Two years ago the government introduced a further scheme, the Real Estate Scheme (RES). This extended the rights of foreign buyers, allowing them to own apartments and villas priced below £300,700, but again only on pre-approved projects. RES projects are intended to be smaller than the IRS ones, and not resort-based. Owners do not automatically qualify for residency.
Emerald Heights is a 45-acre RES site 15 minutes above the south coast, where British developer Stephen Aldridge plans to build 320 one- to five-bedroom apartments and villas.
Prices range from £186,500 to £1,117,300, with the first units due for completion by the end of 2010. As there are few local facilities, a supermarket, high-speed internet and business centre is planned for the site.
Contacts and factfile
Villas Valriche: Cluttons Resorts (020 7584 3050). Service charge averages about £300 a month.
Emerald Heights: Erna Low Property (020 7590 1624).
Tax: Mauritius has no inheritance tax or Capital Gains Tax. Income tax is 15 per cent.
Flights: There are 12 flights a week from London to the capital, Port Louis, which can be taken on British Airways, Virgin or Air Mauritius.
Duty: Registration Duty is £42,000 for IRS buyers and £12,000 for RES buyers. Notary fees are 0.5 per cent.