2024 Budget Highlights: Impact on the Mauritius Property Sector

As per the Mauritius National Budget announcement last week, the Mauritius economy is marked by robust expansion, driven by sound fiscal and monetary policies, a flourishing tourism industry, and substantial public sector investment in large-scale infrastructure projects.   According to the Economic Development Board (EDB), GDP growth reached 7% in 2023, bolstered by high total investment and a record level of Foreign Direct Investment (FDI). The Ministry of Finance, Economic Planning, and Development forecasts a growth rate of 6.5% for 2024, propelled by a surge in construction activity, higher exports, and increased private investment. Despite global economic challenges, Mauritius is implementing strategies to restore investor confidence, attract foreign investment, and promote sustainable economic development. The budget places a strong emphasis on fostering innovation and technology in the property sector. Investments in research and innovative technology are expected to drive productivity and economic growth. The measures outlined in the budget are projected to boost total private investment by Rs 28 billion over the next three years, significantly contributing to GDP growth in 2024/25.

Key Measures Impacting the Property Sector The 2024 Budget introduces and maintains significant measures that directly impact the property sector in Mauritius. Let’s take a closer look at these below. 1. Home Ownership Scheme: Offers a 5% refund on property purchase costs, up to Rs 500,000, extended until June 2025.
This scheme applies broadly to property purchases and includes properties acquired under the ‘vente en l'état futur d'achèvement’ (VEFA). 2. Home Loan Payment Scheme: Provides a 5% refund on secured housing loan amounts, up to Rs 500,000, also extended until June 2025. 3. Registration Duty: Levied on the difference in share values when acquiring immovable property as equity in a company. An effective change in ownership of a company will be deemed to have occurred where there is a change of more than 10% in its shareholding. 4. Foreign Entities: Can hold immovable property through non-renewable lease agreements for industrial or commercial purposes for up to 30 years. 5. Social Housing Units: Transfer by NSLD is exempt from registration duty, land transfer tax, and tax on transfer of leasehold rights. 6. Morcellement Projects: Must allocate 4% of land for green forests, predominantly featuring endemic trees. 7. Setback Requirement: New morcellement projects require a minimum 30-meter setback from existing settlement boundaries. 8. Strategic Environmental Assessments: Required for projects on land areas above 10 arpents for new morcellement projects, projects under the PDS, and smart city projects. 9. Smart City Companies: Contribution per residential property or serviced land plot increased from Rs 25,000 to Rs 100,000. 10. Management Company Services: Services provided by management companies to trusts and foundations with non-resident settlors and beneficiaries will be zero-rated for VAT purposes.

Foreigners Moving and Working in Mauritius

The 2024 Budget introduces several measures to facilitate the process for foreigners who wish to move to and work in Mauritius. The threshold for the basic monthly salary required to qualify for an Occupation Permit under the Professional Category has been reduced from Rs 30,000 to Rs 22,500. Additionally, a temporary Occupation Permit of 3 months will allow professionals with a minimum of 10 years' experience to work while awaiting approval of their applications. Regarding property ownership, foreign entities are now permitted to hold immovable property through non-renewable lease agreements for industrial or commercial purposes for up to 30 years. These changes aim to attract foreign talent, promote investment, and streamline processes for individuals seeking to live and work in Mauritius. The budget initiatives create a more welcoming environment for foreigners looking to establish themselves in the country.

Local Homeownership and Investor Support The Home Ownership Scheme in Mauritius offers a significant incentive by providing a 5% refund on property purchase costs, with a maximum cap of Rs 500,000, which has been extended until June 2025. Pre-sale agreements also qualify under this scheme provided the deed of transfer is signed and registered by 30 June 2025. Similarly, the Home Loan Payment Scheme in Mauritius provides a valuable opportunity for individuals seeking to secure housing loans by offering a 5% refund on the secured loan amount, up to a maximum of Rs 500,000, which has also been extended for a further year. This measure aims to make homeownership more accessible and affordable for citizens, encouraging individuals to invest in real estate. By offering a substantial refund on property acquisition expenses, the government aims to incentivize individuals to invest in property, stimulate the real estate market, and promote a culture of homeownership in Mauritius. The extension of this scheme highlights the government's commitment to supporting citizens in their pursuit of owning a home and enhancing accessibility to housing finance options.

Green Spaces in New Developments   The 2024 Budget emphasizes the importance of incorporating green spaces in new developments. New morcellement projects must allocate 4% of the total land area for green forests, predominantly featuring endemic trees. This requirement also applies to projects developed under the Smart City Scheme and the Property Development Scheme (PDS) that are planned on land of more than 5 arpents and have not yet been issued with a letter of intent. By mandating the allocation of green spaces in new developments, the budget aims to promote environmental sustainability and biodiversity conservation in new developments. These measures align with the green growth strategy of Mauritius, focusing on sustainable economic development and environmentally responsible practices. The integration of green spaces in new developments not only enhances the aesthetic appeal of the projects but also contributes to the overall well-being of residents and the environment.

Overall, the 2024 Budget sets a foundation for a more dynamic and inclusive property sector in Mauritius. By promoting foreign investment, supporting affordable housing initiatives, and encouraging technological advancements, the budget aims to create a conducive environment for growth and development within the property market. To learn more about how Blue Diamond Capital’s accredited professionals can mitigate your risk and elevate your real estate investment portfolio, schedule a free consultation with us here.   Published by: Levana Naidoo, Property Investment Director June 14, 2024