Buy an off-plan property

Buy an off-plan Property : How Safe is Your Money?

Me Hart de Keating, Notary, provides some insights

To capitalise on the tax advantages in Mauritius, foreigners oftenly opt for real estate investments, including to buy an off-plan property through the VEFA mechanism (Vente en État Futur d’Achèvement).

Chris Lazare, Partner – Mauritius Sotheby’s International Realty, met with Me Hart de Keating, a renowned notary in Mauritius, who explains the property buying and selling process, including off-plan sales.

How Does a VEFA Work?

To buy an off-plan property in Mauritius, you will initially need to sign a preliminary reservation contract.

During this stage, the buyer’s funds are placed in escrow with the notary, ensuring the buyer’s funds are safe, and can be refunded if the project fails to break ground. 

What About Construction Completion Guarantees?

Once the contract is signed, the buyer benefits from various mandatory guarantees, similar to those in force in France. Among these, the “garantie financière d’achèvement” ( GFA) assures the buyer that the project will be completed even in the event of difficulties encountered by the developer.

Furthermore, guarantees such as the ten-year warranty provides protection against hidden defects and construction flaws. Also, the construction insurance ensures repairs will be made if needed.

Your funds are therefore secure when you decide to buy an off-plan property.

What About Laws and Regulations for Off-plan Sales?

It’s noteworthy that Mauritius, being a former French colony, has inherited a legal system largely influenced by French laws. This inheritance significantly helps French buyers in understanding the buying and selling process. 

Process of Acquiring a Built Property

The purchase of an existing property typically involves the signing of a preliminary contract. 

Once the purchase is concluded, the transfer of ownership is registered at the Conservation des Hypothèques, ensuring the advertising of the buyer’s title deed, an important step in the buying and selling process in Mauritius.

Fees and Taxes

Whether to buy an off-plan property or an already-built property, taxes apply, including a tax of approximately 5% of the property acquisition price.

Additionally, upon resale, the buyer will also need to pay a similar tax.

What about notary fees?

Notary fees vary depending on the type of property and are regulated by the Notary’s Act, typically ranging between 0.6% and 1.25% of the acquisition price.

Live in Mauritius

If you’re looking for a property to rent or buy in Mauritius, contact us – info@sir.mu

Published on April 30, 2024 by Laetitia Melidor

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