Budget 2021-22 Presentation : Real Estate and Business Facilitation measures
On the 11 Jun 2021, the Hon. Renganaden Padayachy, Minister of Finance, Economic Planning and Development presented his budget for 2021/22, named "BETTER TOGETHER".
Ken Poonoosamy, CEO of the EDB, comments : "The budget sets out a series of measures to achieve this ambition. Indeed, we must steer our way back on the path of recovery and prosperity and leave behind the negative fallout of the pandemic and further pursue our aim to emerge stronger by undertaking necessary reforms. Central to this ambition is our determination to open our borders to the world. We must also restore business confidence and become more resilient to any future shocks. The budgetary exercise will instill confidence in the economy and prepare it for the long term by restoring the image of Mauritius as an investment and trade platform of choice for investors, local and foreign. In furtherance to improving the business climate and spur investments, several measures on improving the ‘ease of doing’ business have been announced, with the distinctive measure being the creation of the Regulatory Impact Assessment (RIA) Agency, which heralds a new way of mitigating any potential negative impact of upcoming legislations on businesses. A customized set of incentives will be provided under a new Premium Investment Certificate with a view of attracting innovative activities, high-tech manufacturing, medical, Biotech & Pharma and knowledge Industry. With respect to construction and real estate, measures announced will ensure the momentum for the short and medium-term growth. Investment in public infrastructure also builds long term resilience, widens opportunities, and facilitates businesses by not only improving productivity but also contributes to improving the quality of life of the population. (...) Furthermore, EDB will be adopting a new strategy with respect to attracting new talents through the amendments to the occupation permit and Permanent Residence Scheme. Through targeted campaigns in association with MTPA, EDB will position Mauritius as a preferred destination for retirees and long stay tourism. With the re-opening of our borders as from 15 July 2021, we are welcoming investors, travelers, tourists and residents back to Mauritius to come to invest, live, work, enjoy and retire."
Below the measures related to Real Estate and Business facilitations :
LOCAL REAL ESTATE
Home Ownership Refund Scheme
- Refund of 5% up to a maximum of Rs 500,000 of the declared value on the acquisition in FY 2021/22 of a house, apartment or bare land to construct a residential unit. If the property is sold within a perod of one year of the date of the acquisition, the amount received under the scheme will have to be refunded.
- Registration duty exemption (5%) for the first-time buyers will apply to the first Rs 5 million of the acquisition value, instead of being limited to property whose value does not exceed Rs 5 million
- 5% refund on home loans taken to construct a residence (up to a max. of Rs 500,000)
Value Added Refund
Criteria applicable for refund of VAT on construction of a house or residential apartment :
- The cost of construction of a residence or the purchase price of the residence should not exceed Rs 3 million, and the refund will be up to a maximum of Rs 300,000
- The household income eligibility threshold for the refund will be Rs 1 million per annum
- The refund will be applicable on the construction or purchase of a first residence
FOREIGN REAL ESTATE
Sale of IRS / RES
To create a level playing field with other property schemes and accelerate the sale of a few remaining IRS/RES units, registration duty on the sale of an IRS or RES residential property will be levied at the rate of 5% or USD 70,000 whichever is the "lower". Previously, it was USD 25,000 for RES and USD 70,000 for IRS or 5% whichever was the "higher".
Sale of Land to a Non-Citizen
- Promoters under Smart City Scheme will be allowed to sell one plot of serviced land not exceeding 2,100 m2 to a non-citizen holder of Occupation permits, Permanent Residence Permit or a Residence Permit for another period of two years, that is, up to 30 June 2024 instead 30 June 2022.
- Promoters under the Property Development Scheme (PDS) will also be allowed to sell a plot of serviced land provided that the total area of all plots of serviced land for sale should not exceed 25% of the land area planned for the construction of residential properties.
Investment in Hotel Scheme (IHS)
- Sale of units in approved hotel development increases from 60% to 80%
- Owners can occupy their units for 180 days instead of 90 days per year
- No restriction for number of days to occupy for holders of a Premium Visa
New Amendements to the Non-Citizens (Property Restriction) Act
The Non-Citizens (Property Restriction) Act will be amended to provide that no approval is required from the Prime Ministers’ Office (PMO) for disposal of property under the EDB Schemes (e.g. Property Development Scheme, Integrated Resort Scheme, Business Purpose, Smart City and G+2) but only for EDB to notify the Prime Minister’s Office of such disposal.
- A non-citizen will be eligible for an OP irrespective of visa category upon arrival (Waiver of business visa)
- Exemption for spouses of OP holders wishing to invest or work in Mauritius applying for an Occupation Permit or a work permit
- Waiver of the maximum age limit of 24 years for dependent children
- Introduction of a new category - the 10-Year Family Occupation Permit for those contributing USD 250,000 to the COVID-19 Projects Development Fund.
- Non-citizens holding an OP as self-employed will be allowed to incorporate a one-man company and employ administrative staff.
- Extension for Work Permit allowing non-citizen residents to bring foreign carers and maids to work in Mauritius
- Setting up of a dedicated concierge service to investors and retirees entering Mauritius.
- Setting up of a privilege club scheme (privilege access to hotels, golf courses, restaurants, private medical institutions, amongst others).
- A Smart Card will replace the current paper-based Occupation Permit
- Where an application for an Occupation Permit requires views and recommendations of a ministry or public sector agency, the latter shall within 5 working days submit its views or recommendations to the EDB or else silent is consent principle will apply.
- Ground + 2 apartments : A non-citizen who purchases or otherwise acquires an apartment used, or available for use, as residence, in a building of at least 2 floors above ground floor, provided the purchase price is not less than USD 375,000 will be issued with a residence permit, including for his dependents, and exempted from the requirement of a work or occupation permit
Permanent Residence Permit
- Holders of a 10-Year Permanent Residence Permit will have the validity automatically extended to cover a 20-Year period.
- Holders of a Permanent Residence Permit will be able to renew their permits and they will be given the flexibility to switch category between investor, professional and retired.
Professionnals (Foreign employees employed in Mauritius)
- Extension in validity of the Occupation Permit for Professional from 3 to 10 years
- Flexibility to switch jobs for non– citizens holding an Occupation Permit as a Professional
- The monthly salary applicable for an Occupation for professionals in financial services will be brought down to Rs 30,000 (limited only for fund accounting and compliance services by a company holding a license from the FSC, and the professional will need to have at least 3 years relevant work experience).
These measures are subject to amendment during the passing of the Finance Bill in the coming weeks.