FAQ

• Buying off-plan via VEFA (Vente en l’Etat Futur d’Achèvement) is the acquisition of an immovable property which is not yet built, or which is under construction. On the day of the sale, the buyer becomes immediately the owner of the land and the constructions if any. The VEFA usually involves a CRP (Contrat de Réservation Préliminaire) which is a preliminary reservation contract setting out, inter-alia, the location and description of the property, the purchase price and terms of its revision if applicable, the date on which the sale can be concluded and any conditions precedent. Upon the signature of the CRP, the buyer is required to pay a security deposit which amounts to a maximum of 2% or 25% of the purchase price depending on the time limit for the signature of the deed of sale. Following the signature of the CRP, the payment of the purchase price of the property under VEFA shall be made in tranches in accordance with the Code Civil: a maximum of 35% of the purchase price upon completion of the foundations; a maximum of 70% upon the “mise hors d’eau” (i.e. finished exterior walls, roofs and terraces); and a maximum of 95% upon completion of the works. The remaining 5% is payable when the property is made available to the buyer.
• The SCIA (Société Civile Immobilière d’Attribution) is a legal structure whose purpose is the construction or acquisition of buildings to be split into fractions with a view to be allocated to the partners of the SCIA. The purpose of the SCIA also includes the management and maintenance of the buildings until a different organisation is set up. The partners of the SCIA are required to make payments in response to calls for funds needed for the acquisition, construction or fitting out of the buildings in proportion to their rights in the share capital of the SCIA. Ultimately, following the dissolution of the SCIA, the partners will be allocated their designated lots. The use of a SCIA allows the partners to organise in advance the distribution of a property by allocating lots.
• Real estate projects can combine both the SCIA structure and VEFA mechanism.
• A joint venture (JV) or a consortium can also be used for real estate projects, generally for commercial real estate. The idea behind these structures is to pool resources to set up a new project. Two or more investors will join forces in order to create a business entity, the purpose of which is the construction of buildings, offices and commercial spaces for rent or sale. The different parties involved in these kinds of projects are linked and bound by various agreements setting out inter-alia their mutual business understanding, their contributions and the financing mechanism, the management of the property post construction, a dispute resolution mechanism and generally all their rights and obligations in the project.
• The Code Civil Mauricien (Amendment) Act 2018, with effect as from 15 April 2019, has introduced a new concept of “division spatiale portant creation de volumes”. This new tool aims to provide new avenues in addition to the existing concept of “copropriété” by offering a more flexible way of organising ownerships within a same property or different properties.

Real estate projects with sales in a future state of completion (Vente en l’Etat Futur d’Achèvement – VEFA) may involve a bank or financial institution which will provide a guarantee for the due completion of the project.

The Code Civil provides for two forms of GFA which is an independent guarantee issued by a bank or financial institution for the project.

With the GFA, in case of financial difficulties encountered by the promoter of a project, the bank or financial institution has a monetary obligation to make available the funding required for the completion of the project.​

This is why real estate projects with a GFA generally provide comfort and peace of mind to VEFA buyers.

Article 913 of the Code Civil provides that “Les libéralités, soit par actes entre vifs, soit par testament ne pourront excéder la moitié des biens du disposant, s’il ne laisse à son décès qu’un enfant ; le tiers, s’il laisse deux enfants ; le quart s’il en laisse trois ou un plus grand nombre”.​

This article provides that there is a forced heirship portion, i.e. a “réserve héréditaire” or a “reserved portion”, which is the minimum fraction of the estate that must be bequeathed to the heirs of the deceased.

The reserved portion varies according to the number of children that you have and consists of 1/2 of the estate if the deceased leaves one child; 2/3 of the estate if the deceased leaves two children; and 3/4 if the deceased leaves three or more children.

Therefore, as a donator or a testator, you may not be completely free to dispose of your estate since a certain portion of that estate is reserved for your heir(s).

Note that the application of the forced heirship rule is subject to the application of the Mauritian laws of succession.

Upon the demise of an individual, an “Acte de Notoriété après Décès” (commonly known as “Affidavit de Succession”) is drafted by a notary or an attorney.

Such document is required by banks, insurance companies and other institutions in order to proceed with the administrative formalities following a death.​

In addition, the notary will assist in identifying the rights of the heirs in the succession and will proceed with the distribution of the deceased’s assets among the heirs.

The POA or Procuration is a legal document that allows an individual (the “mandant”) to appoint another person, whether an individual or legal entity (the “mandataire” or proxy), to act in his name and on his behalf.

The POA or Procuration can either be general (i.e. giving general powers to a trusted mandataire to administer the general affairs of the mandant) or special (i.e. giving a special power to a trusted mandataire to do a specific task on behalf of the mandant).​

In some cases, when the power conferred by the mandant consists of selling, mortgaging or disposing of a property, the POA or Procuration must expressly be given to the mandataire.

Living abroad, travelling or having an incapacity are the main reasons someone might need a POA or Procuration.

In order to benefit from the exemption provided under section 27 of the Registration Duty Act 1804, a “first time buyer” shall fulfill a set of conditions and make a signed declaration in that respect.

For instance, some of the conditions are as follows: (i) the buyer or his/her spouse must not already be the owner of any immovable property in or outside Mauritius; (ii) the total income of the buyer and his/her spouse in the income year must not exceed 2 million rupees in aggregate; and (iii) the buyer must be a citizen of Mauritius.

If a buyer satisfies all the conditions as provided under section 27, he or she will be exempted from the 5% registration duty as follows:

• On the first Rs 2,500,000 for the acquisition of a bare residential freehold plot of land of less than 844m² (i.e. an exemption of Rs 125,000)
• On the first Rs. 5,000,000 for the acquisition of a portion of freehold residential land with a house or a residential lot under the regime of copropriété (i.e. an exemption of Rs 250,000).

The most common taxes applicable in respect of the sale of an immovable property are (*):

• From the Buyer’s side: Registration Duty of 5% of the value of the property, plus an administrative fee (formerly known as “Stamp Duty”) of a minimum of Rs 1,700/-
• From the Seller’s side: Land Transfer Tax of 5% of the value of the property

For example, in the case of a sale of an immovable property valued at Rs 2,000,000/-

5% x 2,000,000 = Rs 100,000 + administrative fee to be paid by the Buyer

5% x 2,000,000 = Rs 100,000 to be paid by the Seller

(*) Note that depending on the nature and characteristics of a transaction (such as the sale of leasehold rights in State Land), other taxes may be levied upon the sale of an immovable property.

Upon the acquisition of an immovable property in Mauritius, the fees of a notary are calculated in accordance with Section 37 of the Notaries Act 2008.​

Part I of the Schedule of the Notaries Act 2008 provides as follows:

On the first Rs 250,000 ——————> 2%

On the next Rs 500,000 —————–> 1.5%

On the next Rs 1,000,000 —————> 1%

On the remainder ————————–> 0.5%

For example, in the case of an immovable property valued at Rs 2,000,000/-

2% x 250,000 = Rs 5,000

1.5% x 500,000 = Rs 7,500

1% x 1,000,000 = Rs 10,000

0.5% x 250,000 = Rs 1,250

Notary fee = Rs 23,750 + VAT, plus any other administrative costs