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Destination & Buyer Guides |
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Buyer Guide | FAQ | Taxes
 Buyer Guide
Using an Agent
A good agent is essential when you buy a property abroad. We offer a wide selection of carefully selected properties for sale from our database, while the majority are in the form of new developments. These generally offer the best value for money and are more in line with popular demand.
There are three stages to property purchase:
- Making an Offer
When you have decided on a property in Morocco you will need to make a verbal offer through the agent which will need to be accepted by the vendor. Once an agreement on price is achieved, sale negotiations will proceed.
At this stage a lawyer should be appointed by you to formalise the agreement. With most properties being off-plan there is often little or no room for negotiation at this stage as the price is normally fixed, dependant upon the current phase of construction.
- Appointing a Lawyer
It is wise to appoint a lawyer who is fluent in your language so that you properly understand all the legalities and exactly what is happening. Our agents will gladly recommend you a good lawyer who will carry out all the necessary checks on the property and complete the legal requirements of the sale.
- The Purchase
The purchase is a standard procedure, similar to anywhere on the Continent. The buyer will open a Euro account with a bank in Morocco and transfer Sterling or Euros to this account. The Euros will then be converted into Dirhams when paying funds to the vendor.
For our off-plan property, the standard procedure is:
- Reservation Fee - This is required immediately to reserve the unit(s) and freeze the price. The required reservation fee depends on the unit you choose, the developer and the development, but typically is around € 3,000.
- Deposit - After 30 days, 30% of the cost of the property is due. This acts as a deposit and is all you are required to pay until completion of the property. 30% is common however various developers and developments require different deposit payment percentages. They may also require interim payments throughout the construction process. You will need to ensure you fully understand exactly what payment structure is in place before committing to a property purchase in Morocco.
- Completion - Upon completion, the remaining 70% is payable. Some buyers will look to finance this sum with a mortgage. The balance of 70% may vary depending on the specific payment structure adopted for your development.
- Additional Costs - Property buyers in Morocco should expect to pay around 6.5% of the property price. This amount is generated from lawyer fees, notary costs, registration etc. Land sales are subject to a charge of 1% to cover the notaries' fees
Mortgages
Mortgages are available in Morocco. Buyers can borrow up to 70% over 15 years with an interest rate (Feb 06) of around 5.5%.
FAQ
 Can foreign nationals own property in Morocco?
Any investor, whether a resident or overseas buyer, can purchase property in Morocco.
Why should I choose Morocco?
Morocco is a modern economy with many new projects underway to dramatically increase Morocco’s standards of infrastructure and tourism facilities. By 2010 Morocco is expected to welcome some 10 million tourists per annum and this will undoubtedly have a very positive effect on any property investments made today.
Meanwhile, much property construction is currently taking place, including six luxury resorts which are part of a very secure government project, “Vision 2010”. The projects are backed by King Mohammed VI, a fact which further increases all-round investor confidence.
Morocco is now part of the “Open Skies” Agreement and direct budget flights are increasingly available to any of Morocco’s international airports. Ryan Air’s announcement this year for 20 new routes to regional airports in Morocco, bringing with them an expected 1 million passengers per year is an example of the exciting new future Morocco has to offer.
The buying procedure is simple and akin to the French system, as are many of the legal and financial institutions. 0% inheritance tax and in some cases capital gains tax as well as other tax exemptions continue to entice investors to Morocco.
Today capital appreciation on Moroccan property can be achieved at between 15% and 30% depending on the property you purchase. However, once Vision 2010 is completed and visitor numbers have increased, these figures are likely to soar upwards.
Finally, the cost of living, fantastic sunny climate, sporting facilities, rich culture vying with a cosmopolitan life, all make Morocco a highly attractive location in which to invest.
What is the economic and political situation?
Morocco has a constitutional monarchy, under King Mohammed VI, who is a leading force in the country’s parliament and its policy making. The King’s progressive spirit and the nature of his policies have transformed Morocco into a land of promise, while huge investment is going into infrastructure projects to encourage overseas interest in the tourist industry here.
A moderate Arab state, Morocco maintains close relations with Europe and the United States. It is a member of the UN, contributing consistently to UN peacekeeping efforts on the continent.
Morocco can be described as a stable economy enjoying steady growth. The Jettou government continues to encourage reform, liberalization, and modernization to stimulate growth and employment.
 How do we travel to Morocco?
A short flight from the UK and a quick ferry crossing from mainland Spain, Morocco is easily accessible.
Morocco’s national airline is Royal Air Maroc (AT) (website: www.royalairmaroc.com). Other airlines serving Morocco are Ryanair, EasyJet, Air France, Alitalia, British Airways, KLM, Lufthansa and Swiss Airlines. Direct flights from all major European cities are fast and frequent.
What is the direct flying time from UK to Morocco?
Direct flying time from the UK is approximately 3 hours.
Is a visa required to enter Morocco?
You will need a full 10-year passport to go to Morocco. Your passport will be stamped, entitling you to stay as a visitor for up to 90 days. This can be extended at Moroccan police stations.
Taxes
Every tax system is different and the Moroccan system is no exception. With its tax laws left as a legacy from the French colonial days, it is essential to have a professional guide you through the process. Each case is unique and there is no rule of thumb to go by.
Tax on Rental Income
Investors from the UK looking to operate a buy-to-let strategy with their Morocco based property investment will be required to pay tax on this generated income.
The first three years can be exempt of tax, but afterwards investors must pay tax on 60% of their generated income at levels between 22% and 44%.
In Tangier, for example, a buy-to-let investor would, after 3 years, be subject to a tax of 22% on 60% of the rental income from his buy-to-let investment property in Morocco.
Property Tax
In Morocco, property owners are required to pay an annual property tax. The first five years are exempt. After this, tax is due based on the annual rental value of the property. The table below gives an approximate guide to the taxes due:
| Value |
Tax |
| Less than 3,000dh |
0% |
| between 3,001 and 6,000 dh |
10% |
| between 6,001 and 12,000 dh |
16% |
| between 12,001 and 24,000dh |
20% |
| between 24,001 and 36,000 dh |
24% |
| between 36,001 and 60,000 dh |
28% |
| more than 60,000 dh |
30% |
Property Rental Tax
If investors do not live in the property at all, a tax of 13.50% on the rental value is levied.
Garbage Collection Tax
The owner of a property is exempt from the garbage collection tax for the first five years. After this period, tax is charged at 10% of the property's annual rental value.
Capital Gains Tax
If the property is sold within five years, capital gains tax is charged at 20% of profit with a minimum of 3% of the sale price. A property sold between six and ten years of ownership will pay 10% capital gains tax and 0% thereafter. Capital gains tax is based on the sale price less the purchase price.
Inheritance Tax
There is 0% inheritance tax for family members, but it is essential to make a legal Moroccan will and seek professional tax advice beforehand. You can ask specific questions or request a call from a tax specialist by completing the small form above.
UK-Morocco Tax Treaty
There is a double tax treaty in place between Morocco and the UK and this protects the investor from being liable for capital gains tax in both countries.
Corporate Tax
If you are considering investing in multiple property units in Morocco, it may be an idea to consider creating a Moroccan private limited company. |
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