The concept of PDS in Mauritius
In recent years, Mauritius has opened to foreign investment by setting up schemes and incentives to encourage and facilitate foreign direct investment. Several initiatives have been taken to allow foreigners to acquire real estate in Mauritius. The first real estate investment scheme was the IRS (Integrated Resort Scheme) launched in 2002, then the RES (Real Estate Scheme) in 2006. In 2015, the authorities combined various elements from the IRS and the RES under a new scheme, the PDS (Property Development Scheme), which was then fine-tuned with some changes.
The PDS program for social development
The PDS was designed to facilitate the acquisition of property by a foreigner in Mauritius. It allows foreigners to become full owners of their property within a real estate development approved by the Economic Development Board (EDB), the state body in charge of promoting foreign direct investment in Mauritius, boosting export and facilitating Mauritian investments in Africa.
The authorities also wanted to bring a social dimension to the development of these PDS projects. Each developer will therefore have to set up a social fund, the PDS Social Fund, with a contribution of MUR 200,000 per unit sold to help the neighboring community or support a social project in the region. The developer must also, when applying for a PDS permit, evaluate the positive and negative social impact of its development on the community and include small entrepreneurs of the region where the development will be carried out. They must also submit a report on the implementation of the planned social assistance program.
What is the PDS program?
A PDS project contains 6 or more residential units, which may be villas or apartments, developed on a plot of at least 4220m2. When the project proposes villas, each villa can be built on a ground not exceeding 5276m2 outside of the common areas of the project. The developer can price each property, unlike the first IRS projects where units had to be sold for at least USD 500,000. Each PDS should include high quality public spaces that helps promote social interaction and a sense of community, as well as upscale recreation and commercial facilities and equipment to enhance the residential offer. The PDS should also offer day-to-day management services for residents, including security, maintenance, gardening , as well as disposal of solid and household waste.
How are properties sold under PDS?
The PDS properties are sold initially off plan, under the legal framework VEFA (sale in the future state of completion). This allows the buyer to become the owner of his property in its future state of completion. As a result, payment of the price of the property will also be done progressively : 25% upon signing of the deed of sale, 10% upon completion of the foundations, 35% at roof slab, 25% upon completion and 5% at delivery.
The developer must provide buyers with a 2-year damage insurance and a ten-year structural guarantee.
The foreign buyer will have to finance its acquisition with funds brought into Mauritius through a recognized bank. If they wish to take a loan in Mauritius in Mauritian Rupees, the first USD 500,000 will have to be paid in USD or its equivalent in any other freely convertible foreign currency. The repayment of the loan must be made in any freely convertible foreign currency.
In addition, one can also find PDS properties in ‘resale’. This means that an owner has decided to resell his PDS property. The owner can do so at no minimum price; however, he will need to inform the EDB as well as the PDS company (the developer) of his intention to sell at least 30 days prior to the sale.
The owner of a PDS property may rent his property through the PDS company or a service provider appointed by the PDS company.
It is recommended to seek the services of a professional real estate agencyspecialized in the sale of PDS developments and other high-end residential properties accessible to foreigners, before deciding on one particular development or property, in order to have a full overview of what is available on the market and the resale property market.