New Regulations Mandate 85% Property Payments for Non-Citizens

In the competitive luxury real estate market of Mauritius, Fine & Country (Mauritius) stands out as a key player, particularly in the northern region of the island. Since December, significant amendments have been made to the regulations governing the acquisition of residential properties by non-citizens under various schemes, including the Integrated Resort Scheme (IRS), Real Estate Scheme (RES), Invest Hotel Scheme (IHS), Property Development Scheme (PDS), and Smart City Scheme (SCS).

These new regulations now require foreign investors to pay 85% of the property purchase price in Mauritian rupees rather than in foreign currencies, as was previously permitted.

In practice, non-citizens must transfer funds in strong currencies (such as USD, EUR, or any other convertible currency) to Mauritius, and then settle 85% of the purchase amount in rupees directly with the property developer.

The remaining 15% can be paid either in foreign currency or in rupees.

This shift aims to bolster the local economy by promoting the use of the Mauritian rupee in real estate transactions.

Before these amendments were introduced, non-citizens had the flexibility to pay the entire purchase price in their preferred currency, provided the funds originated from abroad.

Additionally, when taking out a loan from a local bank, a minimum of USD 500,000 was required to be transferred from overseas.

Notaries play a crucial role in this new process.

As mandated by law, they are responsible for transferring the property payment to the developer, ensuring that 85% of the total sum is paid in Mauritian rupees, while the balance may be settled in either foreign currency or rupees.

They are also required to register the notarial deed with the Registrar General’s Office within eight days and ensure that the registration fees are paid in strong convertible currencies.

For properties priced above USD 750,000, the procedure differs slightly.

The initial USD 750,000 must be transferred to Mauritius and paid in rupees, while any remaining balance can be financed through a local loan in rupees, with repayments made in strong currencies.

During a conference in December 2024, the Governor of the Bank of Mauritius, Rama Sithanen, emphasized that these new rules are essential to eliminate distortions in the foreign exchange market.

He commented, “When people find a little arbitrage, they try to profit, but what they do not realize is that others must pay for it.

There was a growing demand from Mauritians buying IRS properties to pay in foreign currency.

What did they do? They put pressure on the banks to get foreign currency.

That is what we are addressing. We will not allow properties to be sold in foreign currency to Mauritians. It must be sold in rupees. This is the point we are making.”

These regulatory changes reflect a commitment to nurturing the local economy and ensuring a fairer transaction landscape in the Mauritian real estate market.

Source: l’Express