Mauritius is fast becoming a popular investment destination for South Africans, with its offering of financial security, tax benefits, an excellent standard of living, easy commuting to and from South Africa and an appealing residency by investment programme.
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Megan Copley, Offshore Real Estate Investment Director at Sable International, says increasingly South Africans are investing in offshore real estate, to diversify their investment portfolios while protecting themselves against the volatile Rand. In Mauritius one can diversify one’s money across multiple currencies with no exchange control regulation. Mauritius, with its high standard of living, is proving to be a top destination for investors and entrepreneurs.
Benefits of buying property in Mauritius
The tax system
One of the criteria that drives investors to choose Mauritius is its extremely favourable tax system. It is great for individuals receiving a global income as there are no exchange controls, Capital Gains Tax, inheritance or wealth taxes. Corporate income tax is fixed at 15%, and applies to:
- Profits from business activities
- Foreign dividends received
- Rental income
You will need to file quarterly tax returns under the Current Payment System (CPS) if you earn money from rent or other business activities, unless:
- Your income is less than MUR 4 million for the previous year
- The tax payable under the CPS is less than MUR 500
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Culture and lifestyle
Although Mauritius is a small island nation, it is an extremely diverse part of the world, brimming with culture. Mauritius, a nation born of immigration, is known for its hospitality and is host to an already large expatriate community. It offers a similar lifestyle to South Africa, with activities such as mountain biking and fishing at your fingertips.
Close to home for Saffers
The accessibility and convenience of Mauritius makes it an attractive destination for South Africans looking to invest in property or relocate. Mauritius is well connected to major South African cities such as Johannesburg and Cape Town, and several airlines operate regular flights between the two countries. The flight time from Johannesburg to Mauritius is about four hours, while the flight time from Cape Town is about six hours. This proximity to SA makes it convenient for those who want to visit family and friends and conduct business in their home country.
Education
Mauritius is a bilingual country with political and social stability so children enjoy a cosmopolitan education and have access to good international schools and universities. There are many private educational institutions, all offering varied curricula. Another option for parents is to enrol their children in one of the French schools on the island to expose them to a new language and social and cultural development. With several higher education institutions spread across the island, there are plenty of tertiary study options.
Mauritius Permanent Residency Permit
This programme allows the investor (main applicant) and their family members (spouse, parents, parents-in-law and children up to the age of 24) to obtain long-term residency status by investing at least USD 375,000 in a government-approved property.
Residency status for the investor and family members will remain valid for as long as the property is owned, with no physical presence on the island required.
It is a simple, efficient and uncomplicated process to residency and the initial permit can be approved in three months.
If living or purchasing in an area with shops, restaurants, beaches, good clinics and schools is important to you, Grand Baie is the place to be. Most expats prefer new builds in this area and, for USD 375,000, you can buy a villa in a security complex that is ideal for families with young children.
READ: Where are SA's millionaires migrating to?
Property investment finance
Financial institutions or banks can finance all or part of the purchase for expats under certain conditions to assist those wishing to settle in Mauritius. Financing is available to South Africans and the lending rate is the same for Mauritians and non-residents, varying between 3.75% and 6.5% for loans in Rupees and 2.20% and 6.5% for loans in Euros or USD, depending on the banking institution. You may be eligible to borrow up to 70% of the value of the property and there is a restriction on foreign investment (Foreigners can only buy certain types of property).
You will have to pay registration tax, which can range from USD 25,000 to USD 70,000 (R 454,504 to R1,272,288) or 5% of the value of the property. You also need to set aside money for legal costs, including notary fees which are all part of the home-buying process.
South Africans set to pile into Dubai property
South Africans are increasingly looking offshore for property investments, with or without residence, depending on their needs. One such destination which is increasingly catching the eye of SA investors is Dubai according to Nombasa Mawela, licensee and principal of the Seeff Property Group’s newly opened office there.
Samuel Seeff, chairman of the group spotted an opportunity to expand, and Seeff is the first South African brand to set up in Dubai. Nombasa is a well-known South African business mogul and realtor and has lived and operated in Dubai for several years.
The Seeff Property Group is a proudly South African brand with offices across the country as well as in Mauritius, eSwatini, Zambia, Namibia, Botswana, Zimbabwe and Malawi, and now also in Dubai.
Seeff says the prospect of expanding into Dubai is hugely exciting for the group and will enable the company to tap into the offshore property investment market there. Dubai continues expanding exponentially and there are already many top SA brands present such as MTN and Multichoice along with a multitude of other SA businesses including now the Seeff Property Group.
READ: Should you be taking your money offshore?
Nombasa says property investments from buyers from the African continent is expanding and include countries such as Nigeria, Egypt and Kenya, and many SA Expats who live in the City. Seeff looks forward to now growing the market out of SA substantially.
While Dubai prices can be eyewatering with the most expensive property sold in 2022, being a beachfront villa in Palm Jumeirah which sold for just under R3 billion (AED 598 million) property is affordable for SA investors.
Prices start from around R2.3 million (AED 450,000). If you want UAE residency which will give you a UAE bank account, you will need to invest a minimum of just under R4 million (AED 750,000).
From a cost comparison perspective, Nombasa says the R4 million-plus (minimum for residency) range equates to what you will pay for a house in an upper middle-class neighbourhood in South Africa, and there are now finance options available.
Most recently, non-UAE residents can now qualify for a mortgage of up to 75% of the purchase price. The developers are also providing flexible payment plans of up to five years for those not wanting a mortgage. She says the ROI on property investments is among the highest in the world.
READ: What foreign buyers and local sellers need to know about international property transactions
Dubai is regarded among the safest cities to live in and offers centrality to most parts of the world. As a growing business and tourist and shopping hub, opportunities just keep multiplying daily, she adds.
Property types tend to vary from apartments to luxury villas with prices ranging from around R2.3 million (AED 450,000) for a basic studio depending on the location and amenities. A one-bed unit ranges from around R4.5 million (AED875,000) and villas from around R14.3 million (AED2.8 million).
The market has performed exceptionally well, and property values keep rising with just about no upper limit these days as is evident from the Palm Jumeirah villa sale, she says.
Popular areas for property include Downtown Dubai, famous for the Burj Khalifa (tallest building in the world) and a popular shopping and tourist area which is central to most facilities. The fabulous Palm Jumeirah is home to the most expensive oceanfront villas in Dubai.
READ: What to expect when selling your home to foreign buyers
Dubai Marina is popular with Expats for its mix of good beaches and social life. Jumeirah Golf Estate is also popular with Expat families, especially those who prefer outdoor and play areas for children. It also happens to be the home of the famous DP World Golf Tournament.
Nombasa says setting up Seeff in Dubai is hugely beneficial for South African investors as they will be working with a credible and recognised South African real estate brand with an outstanding reputation built over nearly 60 years.
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