We take a closer look at a number of stunning destinations around the world where the tax jurisdictions are every bit as favourable as the climate
Monaco
One of the world’s most glamorous and compelling locations, Monaco has long been a magnet for the most discerning international buyers attracted by its security and advantageoustax environment. Its star-studded annual event calendar includes the Formula One Grand Prix, the Monte Carlo Arts and Jazz Festivals and The Rolex Tennis Masters.
James Price, head of international development at Knight Frank, says;
“The benign and well established tax regime in Monaco continues to attract HNWIs among many nationalities. However, when you speak to residents, it becomes clear this is only one part of the Principality’s appeal. The excellent security remains the single biggest factor, followed by the climate and the lifestyle offered by Monaco both inside the border and in respect of the immediate reach into the Cote d’Azur and Italy. Tax is of course a critical factor, but alongside these rather than on its own.”
Malta
According to the Quality of Life Index 2011 issued by International Living magazine, Malta was one of two countries that tied for first place for the title of Best Climate. Sharing top honours (just for climate) was Zimbabwe, while Malta is also a safe haven and regarded as the jewel of the Mediterranean. Yet a climate with over 5.2 hours of sunshine on average per day even in December and a strategic position in the centre of the Med isn’t all Malta has to offer.
How about a stable government, economy and a modern health service? George Bonnici, sales and marketing director of Tumas Developments, says;
“These factors carry a lot of pull for wealthy English and Europeans looking to get away from their frosty climes. In fact, frost and snow are unknown in Malta with shirt sleeve order and temperatures of 21 degrees in November. Flights to many European capitals are just three hours away, crime is low, education levels high, the locals hospitable and English-speaking with 48 English language schools. As a result, homes and apartments here have now attracted the international set. So have the historic harbours, five-star hotels, restaurants and summer nightlife, foreigners are coming in droves.”
George Fenech, the Tumas Group’s chairman, pioneered the lifestyle concept in Malta. He had a €140 million dream and as a result, Portomaso was acclaimed the most exclusive address in Malta and became home to well-heeled international celebrities and footballers. The company reports that investors who bought in 2000 have seen the value of their property rise by over 300%. Rental returns, too, have risen by 10% to 12%.
Out of the Portomaso mould have been cast two more developments in the north and south of the island, both a stone’s throw from the sea and currently in the process of reaching completion. Tas Sellum offers a one-bedroom apartment of 68m2 starting at €158,000 rising to over €1 million for larger penthouse/apartments whilst Ta’ Monita’s apartments range from €98,000 to just under €1 million. Both residences are termed a ‘Specially Designated Area’, allowing buyers to purchase more than one property in Malta and Gozo for private use or for business. Basically they have the same rights and privileges as a Maltese buyer with no need for permits to purchase property.
Austria
This country provides an attractive place not only for investors but also for permanent residents: Situated in the heart of Europe, Austria is well connected globally with an excellent infrastructure. Generally, the prices for real estates, compared to other countries, are competitive but attractive.
Dr Christina Morgenstern of Austrostar Immobilien, says…
“According to recent studies, Austria comprises one of the highest living standards with low crime statistics and a unique drinking water resource. Also, the combination of skiing in winter and numerous activities in the summer makes Austria a gem amongst holiday seekers as well as investors.
“Affordable real estate prices contribute to the overall impression of Austria. Especially, the region around the Lake Millstaetter See in Carinthia, the most Southern district of Austria, provides attractive prices of real estates and highest living quality in comparison to the large cities and surrounding areas of Innsbruck,
Salzburg and Vienna.”
Mauritius
As second-home destinations go, Mauritius is relatively new on the global scene. It is only recently that non-Mauritians have been allowed to buy on the island and the market is tightly controlled.
The government has introduced the Integrated Resort Scheme (IRS), a system designed to keep property development at the high-end of the market, in order to attract wealthier investors and residents from overseas. According to Villas Valriche, under the terms of the IRS, which only came into effect in 2002, foreigners not only benefit from owning one of a limited number of quality homes but they also automatically receive residency status and with that comes a number of enticing tax benefits, including no Capital Gains Tax (CGT) or Inheritance Tax, low income and corporation tax. Spouses and offspring are also entitled to enjoy the same benefits. The investment in a residential property must be over $500,000.
The government launched a number of programs that allow foreign nationals to own residential properties through various investment schemes – the most appealing and certainly most successful to date are the Integrated Resort Schemes (IRS).
Under the IRS program, foreigners can buy luxury villas in a resort setting of international standards. A property-owner under this scheme is also entitled to a residency permit, which allows the owner and his/her family to reside in Mauritius for the whole duration of the ownership. Each villa can only be up to 1.25 arpents. IRS is open to Mauritius and non-Mauritius citizens, and local and foreign companies under the Companies Act (of Mauritius) 2001. Villas Valriche is one of just a handful of IRS schemes to be fully approved. A new scheme known as the Real Estate Scheme (RES) was introduced in December 2007 to enable foreign investment below $500,000. Below this price owners do not automatically qualify for residency status or certain tax benefits.
Alex Upson, director, Cluttons Resorts comments;
“Mauritius offers the classic Indian Ocean plantation lifestyle. Lying just south of the monsoon region but sufficiently north to enjoy comfortable tropical temperatures all year round. Mauritius offers property investors a variety of fiscal advantages if they buy in developments classed under the IRS scheme. Although relatively straightforward, we recommend that interested parties consult a qualified advisor if they are interested in purchasing. These schemes have resulted in a healthy increase in foreign investment in real estate on the island.”
Adding further enticement to those thinking of investing in property on the island is Murray Adair, CEO of the Indian Real Estate Ocean Company, the developers behind the Azuri project. He says;
“Mauritius is one of the most business and investment friendly locations in the world and a bridge to emerging markets with a 15% flat tax rate for both corporate and personal income. There are no property taxes in Mauritius once taxes are paid on transfer of the property, which has attracted a large number of buyers to the Azuri development. Mauritius offers arguably the safest scheme to sell residential units off plan, directly inspired from the renowned French system, which highly protects the purchaser and there is no succession tax.”
Switzerland
With a reputation for efficiency, stability and traditional values – not to mention beautiful cities, mountains and lakes – Switzerland continues to attract an increasing number of foreign buyers looking for the perfect living and business environment. Its central location in Europe, favourable tax conditions and neutrality, combined with scenic winters and a fantastic climate during the summer, make it especially appealing.
Oli Stastny, Aylesford International’s representative in Switzerland comments;
“Moving your residency to Switzerland not only offers a life in a safe and attractive environment within a healthy economy, but also let’s you take advantage of Swiss tax rules. In some areas of Switzerland, such as Graubünden/St.Moritz a lump sum tax system for foreigners generating no income in Switzerland is offered when moving the residency. It is very attractive for wealthy international people who get the Swiss residency permission in terms of the tax amount and is also a very simple fee without involving excessive administrative work every year.”
