All you need to know about PDS

Published on the 21/03/2017

PDS : Definition

PDS stands for Property Development Scheme. It is a residential scheme combining a property unit with a set of services (tennis courts, fitness room, spa, club house, commercial outlets etc.). A PDS can be in the form of a whole set of villas enjoying common facilities such as sports grounds, health and wellness activities and cleaning services, within a secured gated complex.

Environmentally-friendly, these residences are built in perfect harmony with Mother Nature. In fact, the Mauritian government is laying emphasis on ecological constructions. Promoters will have to integrate eco-friendly elements to their projects such as natural light, solar photovoltaic panels, water recovery system and so on. PDS projects are accessible to both foreigners and Mauritians without a minimum selling price (except for foreigners applying for a Mauritian Residence Permit). The Property Development Scheme is attracting more and more teleworkers, liberal professions, investors and retirees, wishing to change their life style or simply settle on a little piece of paradise.

A wide range of advantages

Even if in theory foreigners are not allowed to buy land or real estate property in Mauritius, they may however invest in a PDS unit or build their own PDS unit. Mauritius offers the following tax advantages to encourage the development of PDS projects:

No property tax
No Generalized Social Contribution (CSG) and no Contribution for the Reimbursement of the Social Debt (CRDS)
No tax on capital gains
Net worth tax not levied
No inheritance tax
Flat income tax rate of 15%
Notary fees of about 1.15%
Automatic Residence Permit for any investment of $500,000 minimum

For similar projects, the investment cost in real estate in Mauritius is lower than other countries like France, South Africa and United Kingdom.

Moreover, any investment exceeding $500,000 automatically grants the right to benefit from a residence permit in Mauritius. Hence, the investor becomes a Mauritian tax resident and is granted the right to stay in the country as long as he wishes – with a minimum stay of 183 days every each. This permit is delivered to the buyer, his spouse and children of age not exceeding 24 years old, and is valid as long as he remains owner of his PDS unit.

Interested in buying a real estate property in Mauritius? Follow the steps below:

You wish to buy a PDS unit?
A residential property under the PDS may be sold either on the basis of a plan, during the construction phase or when the construction is completed. Where the acquisition of an immovable property is made on the basis of a plan, the buyer is bound to make payment as constructions works progress. The seller is responsible of the construction till delivery.
If you are a foreigner, you must first of all make an application at the Board of Investment and provide the following documents:

Copy of your passport
Letter of reference from your bank

When your request is accepted by the Board of Investment, you are advised to hire a notary based in Mauritius to serve your interests. You may then proceed to the signature of your reservation contract, then to the signature of your deed of sale and make a first payment of 25% of the total selling price in the escrow account of a notary.

The installments schedule is as follows:
Upon signing of the deed: 25%
Upon completion of the foundation works: 10%
Upon completion of roofed-in phase: 35%
Upon completion: 25%
Upon availability of premises: 5%

If you wish to apply for a home loan to finance your property purchase, you may either contact the banks of your country of origin, or local commercial banks such as Banque des Mascareignes, MCB…

You wish to build your PDS project
This option allows you to invest and generate profits in Mauritius, while becoming owner of a tailor-made property at reduced cost. To do so, you should first apply for a PDS permit at the BOI. The company requesting such a permit should have at least one Mauritian shareholder owning land in Mauritius. The surface area of the land should range between 1 and 10 hectares. The project should provide for at least 5 villas as well as commercial spaces, sports grounds, spa, etc.

For further information, please go through the list of legal documents below or contact professionals who would be happy to advise you on your project.