SA rich opt for Mauritius as no inheritance tax fuels property boom

With its long stretches of white-sand beaches, blue lagoons and lack of inheritance tax, the Indian Ocean island of Mauritius has long been a beloved destination for high-net-worth individuals in search of seclusion. 

Now, a new player is upping the ante for leisure-seekers. Kerzner International, developer of the Atlantis The Royal – the ultra-luxury Dubai hotel that recently hosted Beyonce in a R1.8m-a-night suite – is investing about R1.8 billion in 52 ultra-exclusive villas on Mauritius’s eastern coast. Prices for properties on the former nine-hole golf course range from $2.8 million (R51 million) for a two-bedroom unit to $14.4 million (R264 million) for a seafront villa.

Interest has been robust, with more than 80% of all available units in final negotiations, the developer said in January. Only “a few units” with the four-bedroom configuration have yet to be sold.

Property is a key source of direct investment in Mauritius, which relies mostly on tourism and manufacturing exports for foreign currency. Between 2014 and mid-2022, foreign direct investment in high-end property totaled 63.3 billion rupees (R25 billion), or roughly 40% of all inflow, according to the Bank of Mauritius. As real estate has boomed, that number has been steadily ballooning. Last year, the finance ministry projected that property sales helped push inflows to 25 billion rupees.

Located off the eastern coast of Africa and a four-hour flight from Johannesburg, the former Dutch, French and British colony has been a hotspot for high-end tourists for 70 years, although foreigners were banned from buying property in Mauritius until 2002. That year, the government rolled out the Integrated Resort Scheme, which offered residency to any foreign buyer who spent at least $375 000 (R7 million) on a luxury residence or “development scheme.”   

The first investor to bite was Medine, which owns 10 000 hectares of land in western Mauritius and set up the Tamarina Golf Estate and Beach Club. The Tamarina now includes 119 villas, a restaurant, a boutique hotel and an 18-hole golf course, and is, according to Joel Bruneau, managing director for the property cluster, “the one fully sold and fully completed IRS estate on the island.”

Among the newer entrants in the market is Heritage Villas Valriche, which sold its first villa in the southwest of the island in 2007 and is now in its final phase of expansion with the construction of 46 new units. In total, said CEO Anton de Waal, the project has attracted 13 billion rupees in foreign direct investment.

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