New laws for the development of retirement-based communities
Purpose-built luxury retirement-based communities can be developed under the Property Development Scheme (PDS). The new regulations came into force on 4 May 2019. Promoters will be allowed to construct purpose-built buildings or bring an existing building under the scheme targeting senior citizens (both Mauritians and non-citizens).
Conditions applicable to promoters
A new development or an existing building must include at least 25 residential units, exclusively for use by seniors. The project must provide for personal care and home care services that may include facilities such as a nurse station, provision of daily food, 24 hours on-site monitoring emergency health services and leisure facilities. The promoter will also be required to obtain a residential care home licence under the Residential Care Home Act for his project.
Eligibility criteria and facilities to foreign retirees
A retired person should be 50 years or above. Any person including a non-citizen may acquire the residential unit provided that it is occupied by a retiree. A foreign retiree will be allowed to:
(a) purhase a residential unit either on the basis of a plan, during construction or when the construction is completed;
(b) acquire the right to live in a residential unit for the rest of his life free of rent;
(c) to lease or rent a residential unit under the Scheme.
A non-citizen retiree applying under the scheme will be eligible for a residence permit for himself/herself and his/her spouse or common law partner until such time the property is no longer owned or occupied by the retiree.
Fiscal Incentives under the scheme
The following fiscal incentives will be granted under the Scheme
- a 5-year income tax holiday to a foreign retiree issued with a residence permit under the scheme on pension income and other income remitted to Mauritius by himself/herself and his/her spouse or common law partner; and
- to the promoter of a project:
- a 5-year income tax holiday on profits generated;
- exemption from customs duty on the importation of machinery, equipment, construction materials and other inputs including furniture in semi-knocked down form on the condition that at least 20% local value addition is incorporated therein; and
- exemption from the provisions of the Morcellement Act
Furthermore, a foreign retiree who is taking permanent residence in Mauritius will be eligible to the standard exemption of customs duty and VAT granted on importation of household and personal effects.
Being given that the project will be registered with the Economic Development Board, standard VAT exemption granted in respect of a purpose-built building for a residential care home will apply. A residential care home is already treated as exempt supply for VAT purposes.
The following conditions of the PDS scheme will not apply to a ‘senior living’ project:
- minimum area for a project to be 1 arpent or more;
- contribution of Rs 200,000 per residential property by promoters to the PDS Social Fund; and
- undertaking a social impact and needs assessment for the neighbouring community of the project.