Mauritius has a growing number of millionaires investing in real estate
The strength of the Mauritius Residency-by-Investment Programme and the stability of its real estate sector makes Mauritius one of the top destinations for HNWIs.
Mauritius is top-rated by high-net-worth individuals (HNWIs) whose numbers on the island have almost doubled in the last decade. Figures published in The Africa Wealth Report 2022 reflect 78% growth, with around 150 millionaires, mainly from South Africa and Europe, expected to move to Mauritius that year.
Andrew Amoils, Head of Research at New World Wealth, says Mauritius was one of the top destinations for net inflows of HNWIs in 2022 because of the ease of conducting business there, competitive tax rates, a fast-growing financial services sector and its reputation for safety and low crime rates.
These accolades bode well for the economy’s health, the barometer influencing investment decisions. On 1 July 2022, the World Bank classified Mauritius as a high-income country with Gross National Income (GNI) per capita for 2021 of ˃USD 13,205.
Government commitment to growth
“Over the years, the Mauritius government and the Economic Development Board (EDB) have shown their commitment to strengthening the Mauritius Residency-by-Investment programme. They clearly aim to drive FDI into the country and move Mauritius to higher per capita income levels,” says Richard Haller, director at Pam Golding Properties (Mauritius).
There is a trend towards tightening controls of some popular citizenship and residency programmes with the recent closure of the Irish Immigrant Investor programme, the possible closure of the Portuguese Golden Visa programme, and pressure from the European Union to reconsider similar programs within Europe. “It is important to note that the Mauritius Residency-by-Investment programme is fully independent of any global body. The Mauritius government and EDB have full control. Given their propensity for improving the programme, this is comforting to know,” says Haller.
Two years ago, the EDB dropped the threshold to achieve permanent residency through investment in residential real estate from USD 500,000 to USD 375,000. Moreover, this status enables investors to work without applying for a separate work visa, as was the case previously. Adds Haller: “Essentially, with permanent residency through property investment, you can move to Mauritius tomorrow and start looking for a job. This is a very comforting plan B option.”
The primary focus points of the government’s income strategy include welcoming investment into the country through business opportunities, real estate that offers foreigners permanent residency for property purchases over USD375,000, providing tax incentives for new business, and generally providing a low-income tax jurisdiction that falls in line with the global tax treaties currently unfolding.
The invitation extended to HNWIs to invest in Mauritius is more favourable because of their ability to reside full-time on the island with the acquisition of property over USD375,000 or investments into other sectors of the economy. The buyer, their spouse and children under 24 are granted permanent resident status for as long as they own the qualifying property.
The comparative pricing of Mauritius residential property is enlightening. When it comes to South African buyers, we can consider the price per square metre for apartments, well-appointed and well-located on the Atlantic Seaboard in Cape Town which can start at R65,000 per square metre. For example, a three-bedroom apartment of 190m2 will cost you in the region of Zar12.8 million.
By comparison, you can purchase a three-bedroom unit of 240m2 within the prestigious Mont Choisy Golf and Beach Estate in Mauritius for USD3,820 per square metre. That converts to around R70,000 per square metre for prime real estate in Grand Baie, a popular area in the north. “This is worth serious consideration as the pricing is similar, however it’s a USD investment, gives you and your family an alternative permanent residency plan and the right to work in another country” says Haller.
For French buyers, a relative comparison would be some of the smaller cities such as Montpellier and Marseille where pricing is on average USD4,100 per square meter, where as Paris will see the price increase to over USD11,000 per square meter.
Knight Frank’s research published in The Wealth Report 2022 substantiates the reasons for investment in Mauritius by HNWIs. Globally, HNWIs consider residential property the safest asset class. However, according to the report, Europeans make investment choices based on improved lifestyle (23%) and safe-haven appeal (19%), which rank above the global average. Other incentives for residential property investment are job relocation (9%) and education (8%).