How to avoid the risks of a real estate investment in Mauritius
Foreigners have been interested in buying a property in Mauritius since many years and particularly since the Government opened the right for non-citizens to buy property under specific schemes. In terms of real estate, Mauritius has interesting offers, whether you are interested to live here part of the year or permanently or as a real estate investment. However, this type of investment may involve risks. That’s why you need to know how to avoid the risks of investing in real estate in a country you are not familiar with.
Make sure the developer is reliable
When approaching a real estate developer, it is important to check his reputation, experience and portfolio. This will allow you to have a better idea of the quality of what he builds. You may need to visit his projects completed or still under construction to get reassured. This is especially important if you plan to buy under the VEFA legal system (Sale under future completion), which is the legal frame of all projects sold off plan to non-citizens in Mauritius. However, do not just choose the project proposed by one developer; always compare the projects of different real estate agencies before making your final choice.
The assistance of a well known real estate agency will be very useful to you since it will have a perfect knowledge of the reliable developers and the best projects to invest in.
The real estate agency will also be able to assist you with all the administrative part of the acquisition process, including the acquisition request you will have to submit as a non-citizen with the authorities.
Make sure of the opportunity of buying the property
A good real estate investment depends mainly on its potential capital appreciation and its future value. This estimate is evaluated in particular according to its location. If a property is situated in an interesting neighbourhood, its rental value increases. It must therefore be in a strategic location, such as a touristic area, for it to have more added value. This way, you can more easily rent it out or resell it at a good price in future. As for Mauritius, the Northern coastal area, in particular the Grand Bay region, is one of the most sought-after areas, and many real estate projects are being developed there. The western coastal area, in particular Tamarin and Black River, is also a region coveted by foreign buyers.
One of the major assets of Mauritius lies in its political and social stability. The government encourages foreign real estate investments with a very well-regulated real estate investment legal frame.
Ask about all the details of the property
On the market, you can also come across offers from individuals that can be enticing. However, without the proper knowledge of the market, you will not have the full picture and anticipate potential disadvantages linked to buying one particular property directly with a seller. The use of a professional real estate agent remains the best option. A real estate agent can provide all the information needed to purchase such a property. He will be able to give you all the details of the property and the buying process.
In addition, you must also know the constraints related to the purchase of a property by a foreigner. Mauritius allows foreign acquisition under certain conditions and within specific schemes and resorts unlike other islands in the Indian Ocean. However, for this you must obtain an authorization to buy from the authorities and keep in mind that the acquisition of a property above € 500,000 may automatically grant you the status of permanent resident on the island. Seek the help of a well-established and reputable real estate agency to assist you in your search, help you make the right choice, and accompany you through until you receive the keys of your dream property.
Be reassured, a bank guarantee is compulsory for any off-plan project
The legal framework of the property acquisition in Mauritius is well regulated and the projects sold ‘off-plan’ are sold under “VEFA” (Sale Under Future Completion) with a financial guarantee of completion (GFA) generally issued by a recognized banking institution in Mauritius. This financial guarantee protects your investment until you take possession of your property. Do not hesitate to ask for proof of this bank guarantee during the first steps once you have selected one project in particular. It does happen that at reservation, the promoter hasn’t received the final bank guarantee yet. Do not worry, the notary will not allow the signing of the title deed when time is due for it without the GFA from the bank.