Budget 2023 – 2024: real estate measures in Mauritius

The 2023 – 2024 budget, whose theme this year is “Dare and Protect”, was presented by the Minister of Finance, the Honourable Renganaden Padayachy, on 2 June 2023. Among the many budgetary measures that focus on social issues by taking into account the most vulnerable, this financial year highlights a series of significant changes aimed at supporting the Mauritian real estate sector. These announcements focus on regulating property transactions while encouraging collaboration and cooperation within the construction sector, and adopting an ongoing approach to sustainable development.  Here is an overview of the key measures aimed at the Mauritian real estate market:

Local Real Estate
The Home Ownership Scheme (reserved only for Mauritian citizens) will be extended until 30 June 2024, and will apply to the acquisition of a property made between 1 July 2023 and 30 June 2024. Purchasers of a house, flat or undeveloped plot of land on which to build a home will be eligible for a 5% rebate of up to Rs 500,000.

If the property is acquired under a VEFA contract, the refund will be made up to the amount disbursed by the purchaser under the VEFA contract, up to June 2025.

In the event that a property sold off-plan is subject to reservation at and/or before 30 June 2024, the Home Ownership Scheme will apply insofar as the deed of transfer is signed and registered before 30 June 2025.

The Home Loan Payment Scheme will be extended for a further year for loans taken out during the period from 1 July 2023 to 30 June 2024. Under this scheme, a repayment of 5% on the amount of the loan taken out, up to a maximum of Rs 500,000, will be applicable to any citizen taking out a secured housing loan to build their own home. Loans disbursed up to June 2025 are covered by this scheme.

VAT refund on residential buildings
Amendments to the criteria – The eligibility criterion for a VAT refund relating to the cost of a residential building, house or flat, whose construction cost does not exceed Rs 3M, has been reintroduced. Individuals can now apply for a VAT refund on residential buildings, houses or flats, provided that the construction cost does not exceed Rs 3M, and the construction area does not exceed 1,800 square feet.

VEFA: A new legal framework will be drawn up by the Economic Development Board and the Chambre des Notaires, to regulate the provisions of the VEFA and the role of the Syndic.

The law on State-owned land: Payment facilities or reduced charges will be offered to lessors of State-owned land, on a case-by-case basis, if they are facing financial difficulties, depending on the nature of the lessor’s activities.

Real estate for foreigners

Property acquisition by non-citizens outside the Smart City and PDS schemes in Mauritius
Foreign nationals holding a Mauritian Residence Permit or Occupation Permit (as principal applicants) will be entitled to purchase a residential property in Mauritius outside the pre-established schemes (Smart City and PDS) under the following conditions: the price of the property must exceed USD 500,000 and the area must not exceed 1.25 acres, nor be located on public land. It should be noted that an additional 10% registration fee will apply.

Sale of serviced land within a PDS or Smart City project
The deadline for non-citizen residents holding a residence permit, a permanent residence permit or a residence permit wishing to purchase serviced land of up to 2,100 m2 in a Smart City or PDS project has been extended to 30 June 2026.

Granting of the Mauritian Residence Permit to retired non-citizens and their families
Retired foreign nationals and their families will be eligible for a Mauritian residence permit following the acquisition of a property within a PDS project for the elderly (senior residences), provided that the purchase price exceeds USD 200,000.

The Sustainable City Scheme
A foreign national and his or her family will be granted a Mauritian residence permit for the purchase of a property with a minimum sale price of USD 375,000 under the new Sustainable City Scheme.

Applications for IRS, RES, IHS & SCS
The procedural fees for the Integrated Resort Scheme (IRS), Real Estate Scheme (RES), Invest Hotel Scheme (IHS) and Smart City Scheme will be harmonised.

A procedural fee of Rs 25,000 per application will be introduced for applications for the acquisition of an R+2 flat by a non-citizen and for an application for a residence permit.

Ease of doing business
The EDB, the Corporate & Business Registration department and the MRA will work together to introduce a unique identification number for each business and company, which will be used in all government agencies.

Banking criteria for non-citizen pensioners
Non-citizen pensioners applying for a residence permit will no longer be required, at the preliminary stage, to open a local bank account. A certified bank statement from the non-citizen pensioner’s country of origin or country of residence proving the availability of funds will be accepted, together with a written request to open a local bank account within 2 months.

Investment required for licensing
The initial investment of USD 50,000 for investors and USD 35,000 for entrepreneurs will be waived at the time of licensing. Applicants will therefore be required to submit proof of remittances within 4 weeks of being granted a permit.

Working in Mauritius
The monthly salary threshold for non-citizen Professionals holding a residence permit will be reduced to Rs 30,000 (from Rs 60,000 previously), irrespective of sector.

Applicants for a Mauritian residence permit will no longer be required to open a local bank account at the time of application.

The ratio of foreign to local workers will be abolished in certain specific sectors.

Tourists and non-citizens holding a tourist visa may apply for a work permit in Mauritius.

Non-citizens applying for a Mauritian residence permit will be allowed to reside in Mauritius for a period of 120 days without having to leave the country.

There will no longer be any restrictions on fields of study for applicants for a Young Entrepreneurs permit.

Introduction of the principle of tacit consent for a period of 4 weeks for work permit applications and for the registration of non-citizen professionals with the following institutions in Mauritius: Allied Health Professionals Council, Dental Council, Medical Council and Veterinary Council.

The Ministry of Labour will develop a regulatory framework to govern the hiring of immigrant domestic workers in Mauritius as maids and baby-sitters.

Applications for work permits will be made solely on the electronic platform of the National Electronic Licensing System (NELS).

Income tax
A progressive income tax system will be introduced from 1 July 2023. A person’s annual taxable income will be taxed at the following rates:

• 0% on the first Rs 390,000.
• 2% on the next Rs 40,000, i.e. on the excess income between Rs 390,001 and Rs 430,000.
• 4% on the next Rs 40,000, i.e. for the excess between Rs 430,001 and Rs 470,000.
• 6% on the next Rs 60,000, i.e. for the surplus between Rs 470,001 and Rs 530,000.
• 8% on the next Rs 60,000, i.e. for the surplus between Rs 530,001 and 590,000.
• 10% on the next Rs 300,000, i.e. between Rs 590,001 and 890,000.
• 12% on the next Rs 300,000, i.e. between Rs 890,001 and 1,190,000.
• 14% on the next Rs 300,000, i.e. between Rs 1,190,001 and 1,490,000.
• 16% on the next Rs 400,000, i.e. between Rs 1,490,001 and 1,890,000.
• 18% on the next Rs 500,000, i.e. between Rs 1,890,001 and 2,390,000.
• 20% on excess income over Rs 2,390,000.

Foreign expertise
An 18-month visa for international expert training will be introduced to support cutting-edge research centres.

Medical tourism
Patients and pensioners as well as two accompanying persons will be eligible for a Premium Visa. Non-citizen pensioners over the age of 60 will also have access to medical insurance.

In conclusion, the Mauritius Budget for 2023-2024 has introduced several measures that are expected to have a significant impact on the real estate sector. The Government’s commitment to promoting affordable housing initiatives and facilities will provide opportunities for individuals and families to become homeowners. Overall, the budget demonstrates the government’s proactive approach to supporting the growth and development of the real estate industry in Mauritius.