To fulfil your dream of acquiring a new home as smoothly as possible, it’s important to understand the legal considerations involved.
The Mauritius Civil Code
The Mauritius Civil Code governs property ownership. It lays down the basic rules for the acquisition, ownership and transfer of property in Mauritius.
Articles 1582 to 1652 define the terms and conditions of contracts for the sale of immovable property. They specify the duties of the seller and the buyer, the conditions for transferring ownership and the safeguards that apply.
Articles 1709 to 1751 should be referred to if you are considering renting a property. They cover the legal aspects of leases, including terms, the rights and duties of the tenant and landlord, and eviction procedures.
Articles 1855 to 1870 address co-ownership - increasingly common in the property sector. These articles govern the management of co-ownerships, the rules governing general meetings, and the rights and responsibilities of co-owners.
If you are planning to use a mortgage to finance a property investment, Articles 2124 to 2159 deal with the guarantees and rights associated with mortgage loans.
If you are planning to pass on a property to your heirs, the laws governing inheritance and gifting are essential. The articles in Book III set out the rules for passing on property.
In addition to the Civil Code, various tax laws and regulations offer advantages to property investors, including tax resident status, property tax and incentives for development projects.
Foreign investment
Non-Mauritians wishing to invest on the island should be aware that property taxation is favourable for foreign investors. There is no tax on capital gains on property, so you will not be liable to pay tax on any gains you make when you sell your property.
Income from letting a property is subject to a flat rate of 15% tax. In addition, there are tax relief measures, including deductions for property rental expenses.
However, there is a well-defined legal framework which must be respected. From the outset, foreigners cannot buy agricultural land unless they obtain a special exemption from the Mauritian government.
On the other hand, you can buy apartments and villas in property developments schemes approved by the authorities. Programmes such as the PDS and RES offer foreign investors the opportunity to become residents or citizens of Mauritius.
A qualified real estate lawyer will be able to guide you through the process, and perform tasks like checking the property, drawing up the purchase contract, carrying out the necessary legal checks and ensuring that you comply with all applicable laws and regulations.
