Reselling property acquired under or outside PDS, IRS, and RES
The resale of real estate in Mauritius acquired under or outside the PDS (Property Development Scheme), IRS (Integrated Resort Scheme), or RES (Real Estate Scheme) is a process that requires special attention. This article presents the resale conditions, implications on the residence permit, and the tax benefits associated with this operation.
Conditions for reselling a property under PDS, IRS, or RES
1- When reselling a property under the PDS, IRS, or RES schemes, the sale price must be at least equal to the initial purchase price. If you plan to sell at a lower price, special authorization from the Board of Investment (BOI) is required. This measure aims to maintain the stability of the Mauritian real estate market.
2- Before proceeding with the resale, it is necessary to obtain authorization from the BOI. This step is crucial, as the BOI will verify that the sale price is reasonable compared to market trends. This ensures that investors comply with the conditions of the PDS, IRS, and RES schemes.
3- The resale of a property is subject to a 5% tax on the capital gain realized. This is calculated on the difference between the sale price and the initial purchase price. Therefore, it is essential to keep all documents related to the purchase and sale to facilitate the calculation of this tax.
4- A crucial point to consider is the impact on the residence permit. If the property is resold within 5 years of purchase, the residence permit obtained at the time of purchase will be revoked. However, if you keep the property for more than 5 years, the residence permit remains valid, allowing you to continue living in Mauritius without interruption.
5- For those who wish to maintain their resident status, it is possible to reinvest the proceeds from the sale into another property eligible for PDS, IRS, or RES. This not only allows you to retain the residence permit but also to explore new investment opportunities in Mauritius.
6- It is also important to note that the new buyer must meet the eligibility conditions of the PDS, IRS, or RES schemes. This means they must be a foreign investor or a Mauritian citizen with the necessary resources to acquire the property.
Resale of a property outside PDS, IRS, RES acquired with a residence permit
Since 2024, Mauritian legislation has evolved to allow non-Mauritian citizens holding a residence permit to acquire a single property outside the PDS, IRS, and RES schemes for a minimum of 500,000 USD. In this case:
1- Unlike the strict conditions imposed for properties acquired under the PDS, IRS, or RES schemes, the owner of a property outside the scheme can resell it at any time. However, authorization from the Prime Minister's office is required, which facilitates the resale process.
2- There are no restrictions on the sale price or minimum holding period for properties acquired outside the schemes. This allows owners to determine the sale price based on market conditions.
3- Another major advantage is that the residence permit remains valid after the resale, even if the proceeds from the sale are not reinvested in real estate. This provides peace of mind to investors, knowing they can continue living in Mauritius without fear of losing their resident status.
4- For properties acquired outside PDS, IRS, or RES, no specific capital gains tax is mentioned. This represents a significant tax advantage for investors, allowing them to maximize their return on investment.
The tax advantages of reselling real estate in Mauritius
The resale of real estate in Mauritius presents several tax advantages that make it an attractive destination for investors. Here are the main points to consider:
- - Absence of capital gains tax: when reselling a property, there is no capital gains tax. Only a 5% government tax is applied to the sale price, which is very advantageous compared to other jurisdictions where capital gains can be heavily taxed.
- - 5% resale tax: in addition to the absence of capital gains tax, the resale is subject to a one-time 5% tax on the transaction amount, simplifying taxation for owners.
- - No property tax or housing tax: owners are not subject to property or housing taxes, reducing the maintenance and operating costs of real estate.
- - Double taxation agreements: Mauritius has signed double taxation agreements with several countries, allowing investors to benefit from favorable taxation on income generated by their real estate, including rents.
- - Fiscal stability: the Mauritian fiscal framework is perceived as stable and predictable, which is an asset for investors seeking to secure their long-term investments.
In summary, the resale of real estate in Mauritius, whether acquired under the PDS, IRS, or RES schemes, or outside of them, is a process that offers numerous opportunities and tax advantages. By being aware of the conditions and requirements, investors can effectively navigate the Mauritian real estate market and maximize their return on investment.
Sell or Rent with DECORDIER real estate, your local agency in Grand Baie. Also, in France in Evian-les-Bains and Thonon-les-Bains.
DECORDIER immobilier Grand Baie
Phone : +230 268 2828
E-mail : contact@decordier-immobilier.mu
Website : www.decordier-immobilier.mu