What South Africans need to know when buying property in Mauritius

Category: Buying a Property

What South Africans Need to Know Before Buying Property

When considering buying property in Mauritius as a South African, there are a lot of factors to consider. To start, South Africans can only purchase property in Mauritius through approved Integrated Resorts Schemes and Real Estate Schemes, also known as Property Development Schemes.

It is important to consider your personal reasons and intentions for buying property in Mauritius, such as whether it is for investment or personal use. Whether you plan to move or emigrate to Mauritius, and whether you are currently a South African tax resident and plan to remain one. Additionally, you should consider your existing offshore assets and the existing structures you have in place for those assets and whether you plan to grow your international asset portfolio. Also important is the number of days you plan to be resident in Mauritius.

In terms of Mauritian factors, non-citizens of Mauritius can only buy property in approved development schemes, ownership can only take place directly as an individual or through a recognised Mauritian entity such as a trust, domestic company, or société. A property investment of at least $375,000 gives access to a residency permit, but properties can also be bought through trusts and companies, and residency permits can be passed on through these structures.

Mauritius also offers many tax-planning advantages, including no capital gains tax, no inheritance, wealth or gift tax, a flat 15% individual tax rate, a corporate tax rate of 15% or lower. No exchange control, a strong tax treaty network, and no dividend, interest or royalties withholding taxes. It is important to note that while there is no inheritance tax in Mauritius, there are "forced heirship" rules which dictate that a certain part of assets must be reserved for certain heirs. It is recommended to draw up a Mauritian will to deal with the "unreserved portion" of assets affected by these laws.

South Africans also need to be aware of South African rules and regulations and how they may impact an offshore investment, such as buying property in Mauritius. This includes the fact that if you purchase a property in your own name, it will be considered part of your estate and will be subject to South African estate tax. Additionally, it is important to understand the South African Exchange Control regulations regarding foreign investments. It is important to consult with a legal and tax professional before making any purchase and get an overview of the regulations and tax laws of both countries.

Contact the team at office@propertyfinder.mu to learn more.

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Karen Thornalley

2023-01-11 06:39:49

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