Diving into Offshore Property
Whether you yearn for your own shoreside haven or are simply seeking a viable foreign investment, our guide to buying property in Mozambique, Mauritius and the Seychelles may just entice you to take the plunge.
While South Africans have for many years enjoyed the sun and surf of their northeastern neighbour, they’ve only been allowed to own property in Mozambique since 2005, when legislation allowed foreign investors to buy in resort developments. Foreigners can attain property rights through numerous vehicles, including via an existing approved development, by forming a partnership with a Mozambican national, by purchasing a unit in a leisure-property project, or by obtaining residency rights.
The country’s property-ownership laws are similar to the share-block schemes used by some leisure-property developers where ownership of brick and mortar is obtained through a title deed. This deed, known as a public national deed, allows investors to resell immovable property without restriction and make a return on investment.
All land in Mozambique is, however, the property of the state and can’t be bought or sold. A ‘right of use’ (called a DUAT title), valid for 50 years and then renewable for another 50 years, can be obtained. This law applies to both local residents and foreigners.
‘Tax and import incentives and dividend repatriation guarantee sound and sustainable investment opportunities,’ says Kevin Lee Payne, CEO of the Coral Palm Development Group, which has been involved in numerous projects in the country, including four leisure-property condominium complexes of over 100 units, three hotel upgrades and as many tourism-resort projects. ‘Investing in real estate in Mozambique as a foreigner is relatively easy to do, as long as the legal requirements are met and adhered to.’
Mozambique | Open for Business
According to the International Monetary Fund (IMF), Mozambique has experienced continued economic growth since 2014, with a real growth rate of 8,8 per cent and inflation remaining low. The National Statistics Institute puts the annual Consumer Price Index in the city of Maputo in 2012 at 2,09 per cent, the lowest in Mozambique’s postcolonial history. The real growth rate is expected to reach 9,2 per cent in 2015, according to the IMF, indicating that Mozambique as an emerging market is an exceptionally stable and growth-oriented investment opportunity.
Between 2005 and 2014, nearly 1 700 direct foreign investment-funded projects worth over R155 billion were approved by the Mozambique government.
Case Study | Praia da Rocha
Just 16km outside Inhambane in southern Mozambique, the Praia da Rocha estate has easy access to the international airport and the resort villages of Tofo and Barra, which abound in beach bars, seafood restaurants, markets and shops. The estate, 7km off the main tarred road, is an unspoiled, peaceful sanctuary that exists in perfect harmony with its environment.
‘The style of the estate is a fusion of East African, Indian Ocean, colonial Portuguese and classic Mozambican,’ says owner Chris Greathead, adding that each house has been constructed using local hardwoods, coconut thatch, and brick and mortar tailored to clients’ specifications.
The estate, 60 per cent of which will be retained as common indigenous coastal vegetation, will eventually comprise no more than 44 beach homes. ‘To date, 18 homes have been completed and a further 12 have been purchased,’ says Greathead. Each beach house has a footprint of about 1 500m2.
Praia da Rocha bay offers safe swimming, snorkelling, kayaking and surfing. ‘You can watch whales and dolphins from your deck, dive or snorkel with whale sharks, manta rays and seahorses, and kayak through pristine mangroves,’ says Greathead. For keen anglers there’s fantastic deep-sea and fly fishing. Or you can hire a local dhow to take you sailing on Inhambane Bay, and picnic on one of the powdery white sand banks and collect pansy shells.
Stands at Praia da Rocha are available for between R300 000 and R1 million, and building packages can be tailored to suit your budget.
For further information or enquiries, contact Chris Greathead at firstname.lastname@example.org, or visit thelookoutatpdr.com to view the Greatheads’ serviced luxury beach-house accommodation, The Lookout, on the estate.
One to Watch | Machangulo Private Nature Reserve
Situated in the southernmost part of Mozambique, neighbouring Inhaca and Portuguese islands in the Bay of Maputo, the Machangulo peninsula comprises thousands of hectares of wilderness and over 20km of sandy white beaches. There are 12 large lakes and vast swathes of indigenous bush on the peninsula, the coastline of which falls within a protected marine reserve. Flanked to the west by bay, with the Indian Ocean lapping its eastern side and a major game reserve to the south, the Machangulo Private Nature Reserve estate is just a 20-minute flight from the capital.
The handful of luxury villas available for sale on the estate are scattered along the reserve’s coastline. Each is unique in character, built according to the preferences of its owner. Typically consisting of several buildings with walkways connecting bedrooms to a central wing, the properties range in size from intimate family homes to eight-bedroom manors with pools, tennis courts, gyms and media rooms. All are individually priced, and the weekly rental income on these homes averages R60 000.
Case Study | The Sanctuary
Situated within the Bazaruto Archipelago, on the San Sebastian Peninsula, The Sanctuary was established in 2000 and is the only privately owned terrestrial and marine reserve in Mozambique. It’s a haven for wildlife, with introduced populations of eland, giraffe, zebra, kudu, waterbuck, wildebeest and nyala (among others), nearly 300 recorded bird species, and the highly endangered dugong in the surrounding waters, together with large numbers of whale sharks and manta rays. Five marine turtle species nest along the reserve’s 20km coastline.
The 30 000ha reserve was declared a protection zone in 2003, which means it’s required to conform to strict conservation and development regulations. The estate is managed by Santuário Bravio de Vilanculos, Lda (SBV), which holds the concession on the land, and was permitted to establish no more than three commercial tourism resorts and 54 private residences here. There is also a supermarket on the estate.
SBV has as its majority shareholder a South African-registered company, Sanctuary Owners’ Association NPC (SOA), whose members are the representatives of each of the current two commercial tourism lodges and the private homes. Members of the SOA have to abide by various rules, which include architectural guidelines, and environmental and general-conduct regulations, in relation to the use of common property. If an owner wishes to sell their property, the buyer will be bound by the rules and regulations of The Sanctuary.
Property-management services are provided to homeowners but it should be noted that The Sanctuary is not a sales agent or reservations office, and any transactions must be negotiated directly between the property owner and the interested party, says the estate’s manager Guillaume van Wyk. Enquiries can be directed to The Sanctuary office, and will be passed on to the relevant people.
According to Van Wyk, it’s possible for South Africans to buy property here – or anywhere in Mozambique, for that matter – with a view to letting it out. If it’s a tourism property (in other words, a property that will be rented out for short stays of no more than 30 days at a time), however, then a private letting licence is required. The application for this licence is done at the local tourism department, and there are various costs and requirements that need to be met.
Since gaining independence, this otherworldly archipelago of islands about 1 600km off Africa’s east coast has enjoyed over 30 years of relative political stability… and a lifestyle second to none. The Seychellois boast a near-100 per cent employment rate – online residential property investment research company Global Property Guide puts the per capita GDP at nearly US$15 000 (about R204 000), the third-highest human development index in Africa.
Add to that a pristine environment. The Seychelles government is considered to be one of the most environmentally conscious in the world, and the hundred or so islands are home to primeval mist forests, huge flocks of seabirds and giant tortoises, black parrots and the flightless white-throated rail (related to the extinct dodo).
Need further convincing that buying in the Seychelles is a good idea? ‘A small population of less than 100 000 maintains a relatively small property market in the islands, which is a significant factor in keeping prices stable,’ says Chris Immelman of Pam Golding Properties International and Projects Division, which markets the Eden Island development just off the coast of Mahé. ‘As a result, the Seychelles attracts investors predominantly from South Africa, Italy, France, Britain and Russia.’
In April 2014 the Seychelles government relaxed its policy on the right to sell privately owned land to foreign nationals, and today non-Seychellois can buy privately owned land provided they meet a number of set criteria and are granted sanction by the government.
Granting of the sanction (it’s recommended that buyers hire a notary to assist with this process) requires that the foreign applicant deposit an equivalent of SCR2 million (about R2,068 million) in foreign exchange with the Central Bank of Seychelles, deliverable to the applicant for his/her local se, including the purchase of property. For a non-citizen, the tax payable on a property is set, depending on the sort of development proposed by the applicant, at between 10 and 30 per cent of the stated transfer value. The notary fee is between one and two per cent of the transfer value but for high transfer values the fee is negotiable.
In keeping with improving the Seychelles government’s ‘Ease Of Doing Business’ programme, which is aimed at ensuring investment in the country, the new policy also makes provision for non-Seychellois to obtain long-term leases for particular developments on state-owned land.
One to Watch | Pangia Beach
This high-end residential development, comprising 33 luxury beach apartments, is situated on the Seychelles’ largest island, Mahé, equidistant between the capital, Victoria, and the international airport. It has panoramic views of the stunning Sainte Anne and Cerf islands, private moorings and direct beach access.
Designed by South Africa’s SAOTA, the residences combine island-style shingled roofs with light-hued stone, textured concrete, and washed wood and granite detailing. They’re split over four buildings and range in size from one- to four-bedroom freehold apartments, to spacious three- or four-bedroom penthouses with direct lift access and their own infinity pools.
Homeowners have access to the estate’s clubhouse and pool, a gym and the marina. They also benefit from 24-hour security, carports and secure garages. The development is due for completion in May 2017.
Case Study | Eden Island
Built on a 56ha reclaimed ‘island’ just eight minutes from the airport at Mahé, and including some 16ha of private waterways, Eden Island has been nothing short of a sell-out success. Nearly 500 homes with a total value of $450 million (just under R6 billion) have been bought at the luxury resort development, with sales for 2015 until October having reached over R650 million.
With basins one to four sold out, Pam Golding Properties is now marketing the final two basins, with everything from 88m2 apartments, priced from US$450 000 (around R6 million), to spacious 317m2 villas priced at US$4,25 million (around R57,2 million). Eden Island is one of the few freehold-property developments in the Indian Ocean where foreigners can purchase, which also enables them to apply for residency. Pam Golding’s Chris Immelman puts the year-on-year increase in property values at an average of eight to 10 per cent. ‘Over and above this, a rental division provides an option to achieve very good rental yields,’ he adds.
According to Immelman, resales have also progressed well, with around US$45 million of such transactions concluded.
‘About 10 per cent of buyers are permanent residents. Generally there’s a minimum occupation on the island of about 30 per cent and maximum of 65 per cent,’ he says.
With beautiful beaches, first-class health and education, good flight connections, widely spoken English and a vibrant social scene, Mauritius lures more than just honeymooners. Since the early 2000s, when it first embarked on its initiative to convert sugarcane land for development purposes, Mauritius has been seen by investors as highly desirable for permanent or part-time residence.
Around 2004, legislation was amended to allow foreign ownership of residential property in terms of what is known as IRS (Integrated Resort Schemes) and subsequently RES (Real Estate Schemes). This can be achieved either in a personal capacity or through a Mauritian-registered business or trust, subject to certain processes and approvals.
IRS targets the high end of the international property market and, under the scheme, residential properties can be sold freehold to foreigners at a minimum price of US$500 000 (approximately R6,7 million). Investors may sell the property with no minimum selling-price restriction or rent the property; they may elect tax residency in Mauritius and are free to repatriate funds or revenue raised from the sale or rental of the property.
Under RES, residential units are sold to noncitizens at no minimum price. Acquisition of property worth at least US$500 000 entitles the purchaser to a residency permit. This scheme is targeted mainly at those who want to work and live in Mauritius, or who want a second/holiday home.
An added drawcard is that the residency permit linked to property ownership extends to the owner’s spouse and dependants, and entitles the resident to apply for an Occupation Certificate to work or start a business in Mauritius. Moreover, IRS owners may take advantage of the favourable fiscal environment offered by Mauritius and benefit from the double taxation treaties the country has signed with 32 countries, including South Africa.
Says Rob Hudson, MD of Hayes, Matkovich & Associates, the South African company marketing La Balise Marina, an exclusive IRS project: ‘Mauritius boasts a solid economy, a stable democratic government, and a low crime rate. And with a 15 per cent tax rate, it’s undeniably attractive.’
One to Watch | La Balise Marina
The only residential marina development on the island, this high-end resort development in the Black River region on Mauritius’s west coast offers residences that have direct access to the sea and surrounding lagoons.
The marina consists of 56 canal-facing apartments of two and three bedrooms, ranging in size from 125m2 to 255m2; 14 villas, ranging from three-bedroom residences of 457m2 to five-bedroom residences of 517m2, all with mooring, a private pool and garden; and 73 duplexes offering from 175m2 to 220m2 of modern marina living.
The phase-one units (villas and duplexes) have been sold out, while the second and final phase of the development, which comprises the last villas and duplexes available on the estate as well as the new apartments, is due for completion in 2017. The final nine duplexes, selling for US$1,315 million (about R17,7 million) went on sale in October.
‘Forty per cent of buyers at La Balise Marina up till now have been South African,’ says Hudson, adding that La Balise’s uniqueness has ensured a high resale value. ‘Apartments bought for US$600 000 (about R8 million) three years ago have resold for US$800 000 (approximately R10,7 million).’
One to Watch | Le Parc de Mont Choisy Golf & Beach Estate
In September, after 10 years of planning, ground was finally broken and construction begun at this golf and beach estate between Grand Baie and Mont Choisy beach in Mauritius’s northern region. The first IRS development in the region, Le Parc de Mont Choisy was launched to the market in early 2014 through Pam Golding Properties, and to date some 110 of these Stefan Antoni-designed units have been sold at a total value of over R1 billion. ‘The market response to this landmark new development has been exceptional from the outset, both locally and internationally,’ says Pam Golding Property group CEO Dr Andrew Golding.
Developed by 2 Futures Property Developers and Mont Choisy Property Development Company, Le Parc de Mont Choisy will comprise a total of over 200 residential units in phases one and two. Work currently under way at the estate includes construction of the first phase of apartments, with the Peter Matkovich-designed golf course to follow shortly.
Says Chris Immelman, MD of Pam Golding Properties International and Projects Division, ‘In phase one we still have some very desirable apartments available, priced from approximately R7 million, while all the villas in this phase have sold out. We’ve experienced phenomenal interest in this development, with the bulk of purchasers from South Africa and France, and a few from the UK and elsewhere internationally.’
For further information contact Pam Golding Properties International and Projects Division on 021 762 2617 or email email@example.com.
- Chris Greathead: firstname.lastname@example.org
- The Lookout: thelookoutatpdr.com
- Machangulo: machangulo.com
- The Sanctuary: mozsanctuary.com
- Pangia Beach: pangiabeach.com
- Eden Island: edenisland.sc
- La Balise Marina: labalisemarina.com
- PGP International and Project Division: 021 762 2617
- Mont Choisy: email@example.com
- La Parc de Mont Choisy: montchoisy.com
Text: Jocelyn Warrington
Photographs: Adriaan Louw, Michelle Snaddon, supplied