Before buying a property abroad, it is best to know the rules governing the real estate market in the host country. We will develop our point of view with the example of three countries located in the Indian Ocean.
Owning a home in a paradise destination tempts you? Before you embark on this new adventure, you must first define your motivations. Do you want to buy a property for your retirement? Make a rental investment? Or benefit from a more favorable tax treaty? Whatever your goal, be clear with yourself. Since tax rules change from one country to another and can have a significant impact on the health of your finances in this gloomy economic climate, you must thoroughly examine the advantages and disadvantages of investing abroad
How to acquire good property?
Know that each country is different. “In Mauritius, for example, a foreigner can not acquire real estate outside the IRS (Integrated Resort Scheme or RES and Real Estate Scheme, IHS or PDS) program. The IRS programs consist of a luxury apartment or villa accommodation, the price of which varies around 500,000 Euros. Another specificity, Thailand requires that foreigners do not represent more than 49% of the owners of a condominium (a kind of joint ownership). This system can cause serious resale problems when the foreign ownership rate of 49% has already been reached. Promoters or you will have no choice but to find a Thai buyer. In the same country, foreigners can not acquire land but can benefit from a 30-year lease.
How is the tax treat?
Do not be seduced by the landscape think about resale before signing. Your goals: Know how your potential capital gains will be taxed. “In Mauritius, the tax is 15%. In Indonesia, they will be taxed at progressive rates ranging from 0 to 37%. Finally, some countries like Thailand do not impose capital gains. ”
How are the income from the property taxed?
Investors should be well informed about the taxation of property income. “In Mauritius, the tax rate is 15%. But in Indonesia, for example, this income is not taxed. Finally, in Thailand, taxation withheld at source of 15% if the income is paid abroad, but they are not taxed when they stay in the country. “You have to take into account so many aspects and situations before buying a property abroad.
The rental is an interesting opportunity for holidaymakers, investors and expatriates during their stay in Mauritius. Luxurious villas, luxury apartments as well as stunning waterfront penthouses are available to those wishing to embark on an investment in Mauritius.
The rental of fully furnished houses or apartments are especially suitable for individuals and expatriates visiting Mauritius. The monthly rent for this type of housing varies between Rs.30,000 and Rs. 85,000 or between 1000 and 2,500 USD. Some investors then embark on the more advantageous relocation of these apartments through a renting pool. Renting Pool is managed by a management company often in partnership with a trustee for maintenance and service. In addition, real estate developers also offer a rental service for housing units when they are unoccupied in a rental pool for a fee and trustee fees. Despite the rarity of the beachfront villas on the Mauritius investment market, their rental prices are offered at prohibitive prices. The units that are available rent between Rs 40,000 and Rs 150,000 per month between 1,200 and 4,200 dollars, per day depending on the number of days. Given the gain in importance for this destination, more and more intermediaries are directing tourists to villas, camps and apartments.
There is currently a decentralization of office space from Port Louis to Ebene, Highlands and Moka. The choice of investors is mainly oriented towards offices all equipped with Internet access and where they can have parking facilities. However, in Port-Louis and Ebène, with the growing number of buildings, it becomes difficult to have access to car parks. This situation leads to a decrease in rents for office space in these regions. The demand for office rental is more important in places like Quatre Bornes or Moka where they can find easier parking facilities. The conversion of houses into office space is also an alternative for those wishing to embark on an investment in Mauritius. Note that commercial spaces are rented monthly per square foot depending on the location, condition and area of the building. In commercial spaces such as the Bagatelle Shopping Mall, spaces are rented at an expensive rates.
Dream escapes properties in Mauritius
It is true that for this past ten years Mauritius has become the new Eldorado of retirees, lovers of the sea, beaches and sun that come from overseas to enjoy the sun all year round away from the cold winter. After years of hard work, it is time to rest and why not start a new life abroad, a simple thing that can prove to be complicated for most of people who have retired. With a gloomy economic situation and insecurity that continues to grow many are those who opt for a retirement abroad, a preferential postcard destination in a beautiful beachfront villa.
The preferred destinations for retirees are Thailand, the Dominican Republic, Guadeloupe, and of course Mauritius, small paradisiac islands at the other end of the world where it is good to live and where all the foreigners in search of ” A new land of adoption are welcome.
The main assets of its paradisiacal destinations are a superior quality of life at an affordable cost, real estate adapted to the needs of retirees offering leisure, a peaceful life where all the chores are taken care of by project promoters. Real estate investments such as maintaining your real estate, finding the home staff and making sure you are safe. Mauritius offers a sumptuous setting where you will find everything; Seaside villas, luxury apartments and colonial houses at the foot of a majestic mountain. For your leisure, you will have a wide choice of entertainment like golf or to visit the lagoons of the Indian Ocean on a luxurious catamaran among others and not count the hinterland that offers nature Abundant as far as the eye can see.
Mauritius is also known for tax advantages and good governance, which means economic stability since independence, a small island that enjoys a good reputation as on of the top destinations in the world for retirees and doing business.
There are many advantages;
No inheritance tax.
A very attractive cost of living
In Mauritius, you will be taxed at 15% and the cost of living is similar to that of Portugal nevertheless the cost per square meter of real estate remains cheaper than that of Portugal.