Real Estate News - Fancy a pad in paradise?
Mauritius is putting the rich first when it comes to expanding the tourism and hospitality sectors in a strategy that focuses on exclusivity.
But to offset criticism in a country where the gross domestic product per capita is below $7,000, the government is also promoting training and social programmes with the help of international developers to provide more than just low-grade work.
To boost international real estate interest, there is the integrated resort scheme (IRS), allowing foreigners to obtain residency if they spend a minimum $500,000 on a property at several developments under way across the island. Incentives are also offered to encourage construction in sectors including offices to hospitals to biotech.
We want the local community fully integrated with these developments, says Rama Sithanen, deputy prime minister and finance minister. We are encouraging outsourcing to SMEs, talking with fishermen and planters and helping with training and economic empowerment.
The IRS was born about five years ago, allowing former sugar estates to convert into luxury resorts with hotels, spas, golf courses and other leisure amenities along with residential villas and properties sold for between $1m and $4m. Mauritius ended its restrictions on property purchases by foreigners and streamlined residency, tax, work and other bureaucratic legislation.
Apart from being a beautiful place, Mauritius is friendly and offers safety, democracy and the rule of law, says Xavier Luc Duval, tourism minister. Coupled with the growth in tourism, the IRS offers good investment and rental prospects.
The Board of Investment has approved 10 projects, representing about 3,500 units. High prices and careful approvals are intended to prevent any flooding of the market.
We are promoting aesthetic beauty while at the same time retaining our cachet and reputation for hospitality, says Raju Jaddoo, managing director. He says the government will make about 25 per cent from the sale of each villa, mostly from the developer. The government will get between $150,000 and $200,000 straight away and paid at source. This includes land transfer and registration costs.
Buyers and developers are enticed by Mauritiuss flat 15 per cent tax rate and no capital, inheritance or withholding taxes. The downside is that some facilities, such as shops nearby, have yet to be developed.
The developer must also provide an environmental and social impact study and pay about $6,000 per villa into a social fund. This money can be held in an account controlled by the developer but must be spent in accordance with the study and under scrutiny from outside auditors.
If the money was transferred to the government, then all sorts of rules to do with things like procurement would have to come in, says Mr Jaddoo.
Anton de Waal, chief executive officer of the Villas Valriche resort that is under construction, says its social fund has four pillars: to raise awareness; employment and training; infrastructure such as water provision; and a venture capital fund to boost entrepreneurship in fields such as arts and crafts.
Property buyers are mostly from Europe but also from South Africa, India, Russia, Australia, the United Arab Emirates and the US and appear to be hooked by the resorts exclusivity and modern-colonial design.
Banyan Tree Corniche Bay, for example, is designed by the UK-based Foster and Partners, which is using local materials and the resort will be car-free and use electric vehicles.
The Anahita resort is close to completion and has sold 143 properties out of 320. Seamus Moore, sales manager, says a lot of time was spent educating buyers about the complex paperwork that is needed to obtain residency and to prevent money laundering.
Its a lengthy process and some people even spoke of invasion of privacy, but I dont agree, he says. Financial intelligence and controls are needed and theres no way round that.
Local Mauritians keen to develop small plots of land but with few other resources are being encouraged under the Real Estate Scheme run by the Board of Investment. Sellers are put in touch with developers and potential buyers include diaspora Mauritians and foreigners who wish to buy for residential or business purposes.
This is more suited to professionals rather than people in the luxury market and we wanted to give opportunities to people in Mauritius to leverage their land, says Mr Jaddu. Lots of Mauritians have made money in the UK property market, for example, and we want to encourage them to come and give us a helping hand.
Article from: www.ft.com