Property investment: a valuable alternative for the diversification of your assets

June 07, 2024

Over the past two decades, Mauritius has established itself as a highly attractive property investment destination, appealing to both local and international investors looking for safe and profitable investments. Despite recent economic challenges, Mauritian real estate retains its status as a valuable asset, offering unique opportunities for both diversifying wealth and generating income.

 

A constantly evolving market

The construction & real estate sector is a key pillar of the Mauritian economy, contributing more than 10% of GDP and generating around 20,000 direct and indirect jobs.

Since the launch of the IRS (Integrated Resort Scheme) two decades ago – the first programme aimed at foreigners, the legal framework in Mauritius has evolved considerably. In support of its investor residence scheme, foreign nationals residing on the island can purchase a house, plot of land or flat directly on the local market, outside existing property programmes – provided they meet certain conditions.

Today, with the Property Development Scheme (PDS), it is becoming increasingly common to see property developments that include both expatriate and local investors, which may share common infrastructure or facilities. Such schemes are permitted under the Civil Code and a collective governing body – Association Foncière Mère, or parent property management association – is usually responsible for their management.

 

The advantages of property investment

Confronted with rising interest rates, inflation and fluctuations in the financial markets, property is positioning itself as a particularly attractive alternative investment. These are major challenges for investors, and the same applies to the world of real estate. These issues cannot be ignored, given their influence at every level: falling purchasing power, rising prices and rising costs (building materials and energy).

Real estate is characterised by its appreciation over time and is therefore less likely to be affected by external market fluctuations. In this sense, investment in real estate, accessible to Mauritians as well as foreigners, makes it possible to generate significant capital gains in an open market when the property is eventually sold. Moreover, real estate investment offers a higher potential return (between 3.5 and 9.5% depending on the type of property) than bank savings rates.

This is why many people turn to real estate rental investment, which remains an interesting proposition in the medium and long term, as it allows for monthly income generation, asset accumulation and speculation on a capital gain.

Real estate investment: a valuable alternative for the diversification of your assets

 

An effective alternative to diversify your assets

Property is an excellent way of diversifying your assets and building up a stable passive income. It is therefore an attractive complement to financial investments. As a tangible asset whose value tends to appreciate over time, it offers investment security, making it possible to organise estate planning or prepare for retirement.

At PLEION Real Estate, we act as experienced advisors and guides for investors looking to position themselves in Mauritius or other attractive jurisdictions, thanks to the strength of our network as part of the Probus Pleion Group. We are impartial to the different products on offer and ensure that each investment is tailored to your requirements. Whether for residential, yield, mixed-use (income plus short-term rental) or commercial (office) projects, we assess your opportunities and accompany you throughout your project.

That’s why we attach particular importance to providing long-term support, particularly for the proper management of your property or property portfolio. At the same time, we offer ancillary services for comprehensive support and personalised monitoring (construction and/or maintenance work monitoring), concierge services (set-up on delivery, installation, etc.), and administrative management (residence permits, etc.). Working with a network of trusted partners, we are able to provide you with 360-degree property management, covering every aspect of your investment, from acquisition to value maximisation. Our collaborative approach guarantees structural and financial optimisation of your property, maximising its value.

 

Why choose Mauritius for property investment?

Mauritius stands out as a highly attractive destination for property investment for many reasons. Its economic and political stability, the languages spoken (French and English are the most common), the time zone (small time difference with the main nationalities of investors, first of all Europe, but also South Africa and the United Arab Emirates), its climate, its leisure activities and its diverse landscapes (sea, lagoons and mountains), among others.

Reinforced regulations and safeguards, such as the future state of completion guarantee and the ten-year guarantee, give investors peace of mind when they decide to invest in a VEFA (‘sale in future state of completion’) property. These regulations give them added security. The quality and reliability of property developments are therefore essential.

The diversity of properties on offer, as well as the fairly wide range of investment budgets, makes Mauritius a sought-after destination for investors. With numerous tax treaties in place with many countries, the island offers considerable advantages to foreign investors, including the absence of double taxation on property income. Another advantage of the Mauritian tax system is that there is no capital gains tax on the resale of property.

Investing in rental property is another great opportunity for individuals. As a leading tourist destination, making your property (flat, penthouse or villa) available to tourists can generate substantial short-term rental income.

Office and coworking spaces are also experiencing considerable growth and are still very popular. As a business-friendly International Financial Centre, the island has an attractive ecosystem for companies, entrepreneurs and foreign investors, many of whom have relocated to Mauritius. Commercial property therefore represents an investment opportunity offering attractive returns.

Mauritius’ tax regime is one of the most attractive aspects for foreign nationals. Corporate income, like that of employees, is taxed at a harmonised rate of 15%, which attracts expatriates from many different backgrounds.

 

Taking a step back a few years and analysing the transactions, we can observe a linear positive evolution in the appreciation of property values. Property is therefore an essential element in the diversification of your assets, as well as an interesting complement to financial assets, and by combining all these advantages, Mauritius has managed to remain an attractive location.

 

Click here to access the article, published in the 2024 edition of the Investor’s Guide.

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