Fact sheets : Own a house

Property in Mauritius: Before you purchase your property

Investing in property in Mauritius can be an uphill battle. You are advised to choose carefully before purchasing property.

Choosing your house in Mauritius

What you should check: 

• Old or new? The advantages and disadvantages.
• What is the size of the property compared to your family size?
• Comfort elements, such as: watchman, basement, parking, exposure, terrace, air-conditioning, etc.
• The eventual cost of any work that will need to be done.
• What are the nearby shops like? Schools? The distance of your property from bus stops (particularly important for your future employees, such as maid, gardener, etc).
• Planning your budget.
• What are the current prices?

Co-ownership 

If your property is located in a residential estate, ask for a copy of the Rules and Regulations Document and read it carefully as it will provide you with all of the regulations which apply specifically to the estate, as well as an indication of what your expenses will be. 

If your property is located in a block of flats, find out about the maintenance costs, as well as the rules and regulations of the building.
Do some researches when registering, or in General's Registrar office on these questions, otherwise ask the notary to do it.

The visit of the property

Go and visit the property several times and at different times of the day. This will give you a better idea of the prevailing winds and where the sun rises and sets, so as to know whether it will be hot or not. 
Check all of the areas; check the state of all of the main installations, such as electricity, plumbing, heating, etc. Don’t forget to ask about any future projects in the area (building, industrial projects, etc.).

Do some researches when registering, or in General's Registrar office on these questions, otherwise require from the notary that he made it. Verify especially the area of constraints, that is the rights that the other parts (nearby, ancient owners, public authorities cf. CEB, CWA, Government of Mauritius) own on the ground: rights of way, sight, non-constructability, limitation of heights, passage of electric cords, etc...

The purchase offer

During negotiations, in the majority of cases, the potential buyer makes a verbal offer to the owner, naming a price which is normally less than the asking price. Sometimes, it may also happen that this offer is formalised in writing in order to give the offer more weight. This is a proposal that is more binding than we think, because agreement of sale or purchase is worth sale or purchase, as the case may be.

The purchase offer expresses the intent of the potential buyer to purchase that property at the indicated price. It is, to a certain extent, a promise of sale, and can therefore, cause some problems if the sale does not go through.

Precautions to take

If it is essential to have a written purchase offer  in order to avoid losing the property, it is advisable to indicate a short deadline (8-15 days) for the offer, as well as the conditions regarding the seller’s response and to indicate that the sale will be legally binding only upon signature of the pre-sale contract. It is also advisable to stipulate that the offer can be revoked by the buyer if the seller does not accept the offer within the deadline given. 

Pre-sale contract 

The pre-sale contract, commonly known as the “bordereau” here, is not a mere formality. It defines the terms and conditions under which both parties will buy and sell the property. Legally speaking, the pre-sale contract entails serious obligations on both parties. The time frame between this pre-sale contract and the signature of the final contract enables both parties to proceed with the completion of a certain number of formalities, whilst waiting for the notarised contract. 

If the seller is a private individual, he is not allowed to ask for any payment to be made before the end of the retraction limit.

The promise of sale

The promise of sale is a sort of pre-sale contract that binds both parties. The owner gives an option on the property to the buyer in accordance with the conditions laid out in the pre-sale contract. It goes without saying, that all promise of sale contracts have an expiry limit, within which the buyer makes a commitment to buy the good.

Down payment and deposit

A cash deposit is normally made when an agreement form is signed. We must make the distinction between down payment and a simple deposit. Whenever the sale is cancelled by the seller, the deposit is refundable to the buyer provided the latter agrees to cancel the sale against interests very often. On the other hand, if the buyer cancels the sale, the seller has the right to claim for the loss of earnings upon the forthcoming conclusion of the sale. However, if the deposit received with the pre-sale contract has been qualified as down payment, the penalty is automatic: if the sale is dishonoured by the buyer, the seller may confiscate the deposit; whenever the sale is dishonoured by the seller, twice the sum deposited must be refunded to the buyer. In all circumstances, any unsatisfied party can request the court to oblige the other party to conclude the sale together with all costs incurred and/or to claim damages.

The final contract

On the day of the signing of the final sale contract, the seller commits to hand over the keys, as well as all necessary documents (Title Deeds, certificates, etc.) to the buyer.

The buyer is, in turn, obliged to pay the price stipulated in the contract. Normally, the buyer does not have any Land Transfer Tax to pay; this is at the owner’s cost. However, this can depend on the individual contract. 

This document must be drafted by a notary, generally the buyer’s. The seller may, however, also involve his own notary at no additional cost. 

The notary will confirm that both parties are in agreement with regards to their respective obligations and will read the contract of sale during the signing. Then, the original sale contract is kept with the notary and an authentic copy is given to the buyer. This is the title of ownership, which enables him to assert his rights as owner.

To consider during the purchase of an immovable property in Mauritius

Legal Aspects

In order to be able to invest your money in property in Mauritius, you must comply with at least one of the following criteria:

1. Be of Mauritian nationality.
2. Be married to a Mauritian under the legal system of Community of Goods and Property.
3. Be an investor having held an Occupation Permit for three years immediately preceding the date of application for Permanent Residence Permit and whose company’s turnover exceeded Rs 15 million every year during each of these three years in respect of each shareholder of the company.
4. Be a self-employed having held an Occupation Permit for three years immediately preceding the date of application for Permanent Residence Permit and whose income exceeded Rs 3 million every year during each of these three years.
5. Be a professional having held an Occupation or a Work Permit for three years immediately preceding the date of application for Permanent Residence Permit, and who has drawn a basic monthly salary of at least Rs 150,000 during the entire three year period.
6. Be a retired non-citizen having held a Residence Permit for three years and who has transferred to Mauritius 40,000 USD or its equivalent in convertible currency annually during each of these three years.
7. Buy in a RES/IRS project.

Financial Aspects

If you choose to do it through a real estate agency, you have agency fees to pay which cost approximately at around 2% of the total sale value, plus 15% VAT.
These costs are incurred by both buyer and seller. 

The costs incurred by the prospective purchaser:

Notary fees:

2% on the first Rs 250,000 + VAT. 
1.5% on the next Rs 500,000 + VAT. 
1% on the next Rs 1,000,000 + VAT.

Registration Fee:
No registration fee on the acquisition of residential units by first time buyers under the middle income group housing scheme, else it costs 5% of the declared value.

The costs incurred by the seller:

Notary fees: None 

Transfer Fees: The seller pays 5% of Land Transfer Tax on the declared value if the property belongs to him for over 5 years.

The seller pays 10% of Land Transfer Tax on the declared value if the property belongs to the past 5 years.

Transfer fees:

The seller pays 5% “Land Transfer Tax” on the declared sum, if he had the property for more than 5 years. 
The seller pays 10% “Land Transfer Tax” if he had the property for less than 5 years.

There are two ways of drawing up a contract

1. The private deed under private signature

The private deed under private signature consists of drawing up the contract solely between the parties, without any formality and without the intervention of a notary. The origins of this type of contract are uncertain and it is possible to dispute the author. However, this form of contract has less legal weight than an authentic contract.

The private deed under private signature is not fully binding. An ill-meaning signatory could at any moment repudiate his signature. Another inconvenience is that private deeds under private signature are prone to mistakes, which can compromise the positive outcome of the negotiations. Finally, its conservation is uncertain, in the sense that, although each signatory receives a copy, there is no guarantee against loss or destruction.

2. The authentic sale contract -a reliable contract 

The authentic contract is drawn up by a notary, signed by him and stamped with the seal conferred upon him by the state; evidence that he has been sworn in. 

The notary has a duty to provide information to his clients. He sets out the wishes of those who come before him in such a way as to give them their full legal weight. He also determines the authenticity of their agreement.

Additional Information

The original contract has a long period of conservation, namely 100 years. The notary who draws it up is obliged to keep the original contract in order to avoid any falsification, loss or deterioration. However, the notary hands over a copy of the contract having the same value as the original. 

The contents of the authentic contract and its date are indisputable. The authentic contract has a fixed date, which can’t be disputed and this differentiates it from the private deed under private signature, which, in order to have the same quality, must be registered. Its contents are guaranteed by the notary, who assumes full responsibility. 

The notary is financially and personally responsible for the contracts he drafts. Any error which could cause prejudice to you will be sanctioned. 

The authentic contract is covered by the code of professional secrecy. Once again, any violation of this obligation will be severely sanctioned. 

The authentic contract is a contract which suffices in itself. It carries the same weight as a judgement; it is proof that it exists (value of proof) and has all powers of the law, which allows it to have recourse directly to full conservatory measures (repossession for example), without having to go through the intermediary of a forced decision (repossession for example) and without having to go through the intermediary of a court decision.