How to own a hotel room or villa?
The Ministry of Finance provided new regulations governing the IHS implementation, a measure regarding the tourism industry and announced in the 2009 budget which allows a hotel promoter to sell a unit (a room, an apartment, a villa or a suite) of his complex to an individual. It can be applied to the condition that the unit’s management is given to the company exploiting the complex. The buyer will not obtain a Mauritian residence permit. For each unit, a bank warrantee of Rs 25 000 shall be provided to the Board of Investment (BOI).
Hence, a company building a hotel complex is authorized to sell or to proceed to a unit transfer from the complex, to an investor, to the condition that a bail is signed with the buyer for the bought unit’s management.
According to the regulations, the unit must be occupied during an average period not exceeding 45 days during the year. The hotel rooms, the villas or the apartment’s acquisition may be done based on the construction plan proposed during or after the construction works.
This formula is also called the « hotel residence » or « combi hotel ». It is applied in Mauritius by Four Seasons and it is said that the future hotel which will replace the Coco Beach will also adopt it. It implies a measure which will probably re-launch foreign investment in Mauritius, the IRS acquisition having slowed by the worldwide economic crisis.
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A SIX MONTH DELAY
A permit demand for an IHS project will have to be effectuate by a the company provided that the latter obtains beforehand a letter of intent from the Tourism Authority and a bail approval from the Ministry of Land .The promoting society must provide all the project details to the authorities: the site’s belonging contract, the construction period, the conditions of the unit’s sale, among others. The permit will be delivered by the BOI only if the company posses the other necessary construction permits delivered by the regional administration. The promoting society will not be allowed to amend its project without the BOI approval. It will be complied to submit, on a three-monthly basis, a report on the accomplished progress during the project’s execution. Every project will also have to start six month after the permit’s attribution. If it is not the case, the bank warrantee will be cashed by the BOI.
A SOCIAL FUND
Every person willing to buy an IRS, RES or IHS property must, by the promoting society’s intermediary, make a request to the BOI. The promoting society will have to provide an Rs 10 000 processing fee for each hotel’s property or unit. The investors will have to take a loan in Mauritian rupee to acquire a property, as announced in the 2009 budget. However, the first $500 000 will have to be paid to the promoting society in US Dollars or in any other easily convertible currency. Furthermore, the bank loan repayment will also have to be effectuated in another foreign currency.
The new regulations authorize the IRS companies to sell land parcels of 1,25 acres each, already converted and which surface area do not exceed 25% of the initial provided area for the buildings’ construction. To be able to benefit from the facilities, the IRS society will have to ensure that before the sales of the land; at least 25% of the residential properties have already been sold. The value of a land parcel must not be inferior to $ 500 000.
Furthermore, the regulations written by the Minister of Finance require all companies in possession of an IRS certificate to create a social aid fund or to debit, at the end of each term, its contribution to the National Empowerment Foundation, according to the number of residences or land parcel sold ( Rs 200 000 per unit). The NEF shall decide how to invest the provided funds.
HOT AND COLD
THE IMPLEMENTATION OF REAL ESTATE INFRASTRUCTURES UNDER THE IRS (INTEGRATED RESORT SCHEME) STATUS) AND THE RES (REAL ESTATE SCHEME) BLOWS HOT AND COLD.
At first and officially, more than 20 luxurious IRS were planned in each island’s corner. Then came the economic crisis, slowing the projects’ starts, though they were approved by the authorities. Some of the promoters even announced that they gave up.
In fact, till now, five IRS were build: Anahita, Tamarina, Villas Valriche, the Belle Rivière IRS and the Club Med Villas at Albion. Two others, la Balise Marina and Matala shall start this year. We estimate that three others, River Club, Corniche Bay and maybe Roches Noires may start next year.
There is a better situation for the RES, much cheaper and accessible to foreigners as well as Mauritians. 21 projects were approved in one year compared to 20 projects in 5 years for the IRS. Casasola and Port-Chambly in the north are very successful. Davyland will start the construction of “1st Avenue” in Rivière Noire, in partnership with the South African giant, Chas Everitt of “Villas del Sol” at “Cape Bay” by going through “Emerald Heights” in the South. The RES seem to have a bright future on the Mauritian soil.
Source: Cote Nord No 88 - Dec 2009
