Six steps to purchasing real estate in Mauritius
Mauritius continues to be a popular destination for migrating high-net-worth individuals as well as for young couples and families looking for real estate investment that comes with permanent residency.
In Mauritius, a minimum US$500,000 purchase of a property in a government-approved development (either an Integrated Resort Scheme, Real Estate Scheme, Property Development Scheme or Smart City) offers the purchaser, their spouse and children under 24 years of age permanent residency status. This holds for as long as they own the property.
“As much as the permanent residency component is an important part of the purchase for foreigners in Mauritius, it’s critical that the underlying real estate investment also offers sound capital growth and rental return opportunities,” says Richard Haller, director for Pam Golding Properties (Mauritius).
Buying property in any foreign jurisdiction can be a complex process. Pam Golding Properties (Mauritius) has prepared a handy Buyer’s Guide that cuts through the legal jargon and makes the steps towards buying residential property easier to understand.
Meanwhile, here are our top 6 tips if you’re thinking of buying residential property in Mauritius:
1. Engage with a reputable real estate broker
A reputable local property broker will be able to guide you through the purchase and assist you every step of the way. Local knowledge is key for you as the potential purchaser and you will need to find someone that you trust to guide you to the best possible solution.
The top brokers will carefully select investment options, and present only the most suitable property matches to you. For example, Pam Golding Properties (Mauritius) has been established on the island for almost 20 years. We only work on projects where a proper due diligence has been completed with developers and the properties have been assessed in terms of value and growth potential.
2. Narrow down the location within the country
Choose your location carefully. “There is always a trade off between type and size of property in relation to location, says Haller. The better the area, the smaller the property for the same value or the higher the price. In less sought-after locations, you will get more property for the same money but you must consider how that might affect the potential for capital growth, rental and resale. Equally better locations offer better access to services.”
It might be a cliché, but the old adage of “location, location, location” still holds true. Pam Golding Properties (Mauritius) made the decision more than 12 years ago to focus on the two prime areas on the island. In the North, it is Grand Baie and in the West, it is Black River. “This is where the infrastructure growth is and where retirees and families moving to the island want to live,” says Haller.
3. Decide on off plan versus completed unit
Once you have decided on the location, you can narrow down the type of real estate investment that appeals to you. Is it a new off-plan development that can offer capital growth over the construction phase, or do you prefer to purchase a completed unit that you can use immediately or rent out to secure a rental return?
4. Know your developer and their track record
Ask your broker about the reputation of the developer and research past developments. Ensure the style and finish corresponds to your look-and-feel requirements. In addition, check that the developer works with the correct contract and payment structure and will put up the required guarantees as laid out by government regulation.
5. Work out how to pay for the investment
In Mauritius, foreign buyers have the option to purchase property with a 70% mortgage, bonded through a bank on the island. Upon application, the bank will assess your income, assets and liabilities as well as the value of the property to determine your eligibility for the requested loan. Interest rates start at around 4.4%, so really competitive interest rates and reasonable rental returns allow purchasers to leverage the property bought.
6. Sign the agreements
Once you have chosen your preferred location, decided what you want to buy and worked out how you’re going to pay for it, you can sign the reservation agreement. If it’s an off-plan plan purchase then it will be a Contract of Preliminary Reservation while a completed or resale property is handled with a different agreement of sale.
It’s important to understand the terms of the agreement and to query any points you’re unsure of. In Mauritius, buyers’ investments are very well protected by government regulations. All funds go to the appointed notary’s trust account and are only dispersed once all documentation is in order.
In summary, here’s what to do to ensure the transaction runs smoothly and you have assurance of handover and completion of the transaction:
- Engage with a reputable, local real estate broker.
- Determine your preferred location.
- Decide on your ideal property.
- Know your developer.
- Do the sums and determine whether you are paying cash or applying for a mortgage.
- Sign the purchase agreements.
Contact Grand Baie Mauritius on +230 263 0600 or email firstname.lastname@example.org