2024/25 Budget - Key insights for real estate sector

Dr The Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development presented the National Budget for 2024-2025 during the recent month of June 2024. With ambitious plans to Make Mauritius a one trillion rupee economy by 2030, the government aims to enhance the ease of doing business to sustain higher levels of investment and strengthen sectoral development. We explore the challenges and opportunities presented for real estate to gain a deeper understanding of their impact on the sector.

Total Foreign Direct Investment (FDI) reached an all-time high of Rs 37 billion in 2023, of which Rs 21.1 billion flowed into Real Estate contributing a total of 5% to GDP. The Mauritius economy is performing well and is forecasted to grow at 7%. 

Rs 57 billion has been earmarked to infrastructure development which includes:

• New road linking La Brasseries-Beau Songes-Flic en Flac
• Construction of Motorways M4 and M5
• Landslide stabilization works at Chamarel, Riviere des Anguilles, Riverire Creoles 
• Construction of Rivière des Anguilles dam and water treatment plant
• Airport development of new control tower
• Port development of acquisition of ship-to-store cranes
• Construction, upgrading, and maintenance of school infrastructure. 

Home Ownership

• The Home Loan Payment Scheme will be extended up to 30 June 2025 and provides for a refund of 5% of the amount borrowed under a secured housing loan up to a maximum of Rs 500,000. 
• Individuals who contracted a secured housing loan can benefit from a refund of 5% of the disbursed loan amount (capped at Rs 500,000) until 30 June 2025.
• Buyers for property acquired under vente en l'état futur d'achèvement (VEFA) will be eligible for the amount paid until 30 June 2025. A property under reservation will qualify for the Scheme if the deed of transfer is registered not later than 30 June 2025.
• Property acquired under a vente à terme will qualify for the refund if the buyer pays the purchase price, not later than 30 June 2025. 

Social Housing

• Construction of 8,000 social housing units under the Social Housing Program
• Construction of 2,169 social housing units around the island
• Construction of 50 social housing units at Agalega
• Construction of social housing units for vulnerable groups

Real Estate Projects

• New morcellement projects are required to have a minimum setback of 30 meters from existing or new settlement boundaries (no sharing of common borders).
• Any morcellement, PDS project, or Smart City project above 10 arpents will require a Strategic Environmental Assessment
• Any morcellement, PDS project, or Smart City project above 5 arpents should allocate at least 4% of total land for a green forest, to predominantly feature endemic trees, and provide a garden setting and landscape complementing the development.
• The contribution payable by a Smart City company per residential property or plot of serviced land will be increased from Rs 25,000 to Rs 100,000 payable to the National Resilience Fund instead of the Smart City Social Fund.

Registration Duty

• Transfer of immovable property as equity in a company will be subject to Registration Duty, levied on the difference between the value of the property and the value of shares held in that company.
• Any transfer exceeding 10% of shareholding in a company will qualify as an effective change in ownership. Therefore, the transfer of more than 10% shareholding in a company owning immovable property will be subject to Registration Duty

Sources: 2024/25 National Budget, EDB Mauritius, PwC, Business Mauritius