Mandatory leaseback, limited use, income distribution and operator risk.
Key points in 30 seconds
Hotel development of at least one hectare.
Up to 60% of units may be sold.
Owner use capped at 45 days in 12 months.
Mandatory leaseback; the buyer cannot freely manage letting.
The product
IHS permits ownership of a unit integrated into a certified hotel. The buyer owns the real estate but must return it to the operating inventory under a leaseback arrangement. The owner does not select guests or the commercial calendar. Personal use is capped at 45 days in any twelve-month period.
Where income comes from
The agreement may provide a fixed amount, a share of unit revenue or participation in a pool. These are economically different. Review distributable revenue, commissions, marketing, maintenance, insurance, furniture, FF&E reserve, owner days and payment priority.
Analyse the income formula
Distinguish fixed rent, minimum guarantee, unit revenue share and hotel pool. Check whether calculation is before or after commissions, marketing, OTAs, staff, utilities, maintenance and FF&E reserve. Request a numerical example reconciled to comparable actual accounts.
Operator strength
Review experience, brand, accounts, contract term, termination and replacement. An international brand may be licensed for a limited term. A yield guarantee should identify debtor, security, currency, duration and remedy.
Owner use and real cost
The 45 days may not be freely available in peak season. Check blackout dates, booking lead time, service prices, cleaning and distribution impact. Calculate the economic cost of an owner night including foregone income and charges.
Resale
Review notice, approval, EDB fee, pre-emption, refurbishment and transfer of the leaseback. Compare with competing units in the same and similar hotels, not a freely operated residential apartment.
Read the management agreement as an operating statement
Identify who sets rates, absorbs discounts, collects revenue and controls the accounts. The sharing base may be gross revenue, net distributable income or a pool across several units; each produces a different outcome. List operator commission, marketing, booking platforms, cleaning, linen, utilities, insurance, taxes, furniture reserve and owner charges. Require reporting frequency, audit rights, payment timetable and treatment of arrears.
Worked yield: from hotel revenue to owner income
Assume MUR 2.4 million of annual room revenue attributable to the unit. After 35% for distribution and operations, a 5% furniture reserve and MUR 180,000 of owner costs, MUR 1.26 million remains before finance and tax. On a MUR 15 million price plus an illustrative MUR 1.5 million registration duty, the return before other acquisition costs is about 7.6%. Lower occupancy or refurbishment can reduce it quickly. This demonstrates a calculation method, not a promised performance.
Owner use has an opportunity cost
The regulatory ceiling can reach 45 days in a twelve-month period, but the contract may be tighter, exclude peak dates and charge cleaning, food or services. Each night used may remove a sellable night or alter the pool distribution. Value personal occupation at the net room revenue the hotel would otherwise earn and deduct it from the economic return. Also confirm booking, cancellation, guests, hotel exchanges and whether unused days carry forward.
Exit and operator risk
Value depends as much on hotel performance and reputation as on the real estate. Review lease term, renewal, termination, operator replacement, refurbishment duties, FF&E reserve, insurance, historical accounts and disputes. Model a temporary closure and capital call. For resale, identify consents, lease transfer, buyer approval, commission, tax and secondary-market depth. A “guaranteed” return matters only where the obligation, term and solvency of the paying party are documented.
Risks
Return depends on occupancy, average room rate, brand, refurbishment and operator strength. A “guarantee” is only as valuable as the guarantor’s solvency, term, currency, exclusions and legal security. Resale can be narrower than for a standard apartment because the next buyer accepts the operating restrictions.
Foreign buyer rules
Acquisition is subject to the IHS framework and approval. At USD 375,000 or more, it may support residence tied to the unit. FX rules require at least 85% payment in rupees after overseas currency remittance; since July 2026 relevant non-citizen registration duty is 10%.
Questions before signing
Who operates and for how long? Are comparable audited accounts available? What is the FF&E budget? Can owner days be taken in peak season? Who funds refurbishment? How is income calculated? What audit rights exist? What governs resale, finance and operator replacement?
Frequently asked questions
Can I rent the unit myself?
No. Operations follow the mandatory leaseback.
Are 45 peak-season days guaranteed?
Not necessarily; the contract may restrict periods and booking.
Is an advertised return guaranteed?
Only where a precise commitment from a solvent counterparty provides it.
Can I resell?
Yes, subject to process, approval and project documents.
Does IHS support residence?
An eligible purchase reaching USD 375,000 may do so.
Related MYKEYS guides
Buying Off-Plan in Mauritius: Understand VEFA Before You Sign
Rental Yield in Mauritius: Calculate the Net Return, Not the Headline
Why Invest in Mauritius Property in 2026 and Why Selectivity Matters
Browse property for sale in Mauritius | Contact MYKEYS
Sources
Government of Mauritius EDB (Invest Hotel Scheme) Regulations 2015, consolidated
Economic Development Board Amendments to IRS/RES/IHS/PDS/SCS regulations (13 Dec. 2024)
Government of Mauritius Immigration Act 2022, consolidated version
Government of Mauritius Registration Duty Act, consolidated version
Government of Mauritius Land (Duties and Taxes) Act, consolidated version
Statistics Mauritius International Travel and Tourism, year 2025
Statistics Mauritius International Travel and Tourism, Q1 2026
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