By Richard Haller
As a cross-border jurisdiction, Mauritius has proved its worth over the past 10 years with an attractive and well-established residency-by-investment programme underpinned by a hard currency property investment, a compelling tax regime and ever improving infrastructure for those residing on the island.
With the growing trend of increasing wealth taxes around the world and geo-political uncertainty on the increase, including countries such as the UK, France, the USA and South Africa, low-tax-jurisdiction countries are reaping the benefit of attracting high-net-worth individuals (HNWI’s). This is not at all about tax evasion, but rather choosing where people want to be tax resident, assuming they are in the position to make the move.
Mauritius offers an affordable hard-currency real estate market, which has shown over 50% capital growth over the past five years. A property purchase over $375,000 within developments approved for foreigners offers the buyer, their spouse and their children under 24 years of age permanent residency status. There is no annual visitation requirement, and the residency status remains for as long as the property is held.
The pricing in Mauritius is comparable per square meter to that of a Cape Town Atlantic Seaboard property, in the range of $4,000 – $6,000 per square meter. The difference is that buyers are diversifying into USD or EUR, while having the option to live and work in Mauritius, become tax resident (which offers a 15% tax rate on individuals and companies) and be subject to no inheritance tax and no Capital Gains tax. This is an attractive option for those looking to grow and protect wealth.
Compared to the United Kingdom, prices are similar to the city of Manchester where prices for new build properties range from £5,000 – £6,000 per square meter.
Property investment options in Mauritius range from $200,000 for an entry-level investment, $600,000 – $900,000 for well-located two- and three-bedroom apartments, all the way up to $1.5 – $5 million for luxury villas. The rental market in Grand Baie is particularly active with rental yields ranging from 4% - 6%. So, in essence, it is possible for buyers to achieve a rental yield of 4% plus some capital growth at 6%, averaging a 10% return per annum in hard currency.
* Haller is the managing director at Sable International: Offshore Real Estate and Investment Migration.
PERSONAL FINANCE