FAQs about buying property in Morocco

• Who can buy and what are the procedures?
• What about mortgages?
• What are the rental opportunities?
• What are the purchasing and running costs of a property in Morocco?
• How much tax will I pay in Morocco?

Who can buy Property in Morocco?

Any investor, resident or overseas buyer can purchase property in Morocco. Residents from any country in the EU or the USA are particularly welcomed in Morocco.

What is the procedure to reserve a Moroccan property?

You can reserve your property in Morocco for just £1,000. This reservation fee holds the property for you for 30 days, freezes the price and includes a free inspection trip.

What are the normal payment terms for buying a property in Morocco?

The exact payment structure on property in morocco varies from development to development and from developer to developer. In general there is a deposit required of between 15% and 40%, sometimes an interim payment and then the remainder on completion. Please contact us for more information on the Moroccan property in which you are interested.

Can I get a mortgage?

Yes. Mortgages are available on Moroccan properties of between 60% - 70%, depending on your personal situation. The current rate is from 5.5% variable to 7% fixed. We can assist you with either a local mortgage or UK equity release.

Do I need to open a bank account in Morocco?

Yes. You will need to have a Moroccan bank account but only in time for the completion of the purchase. We will ensure that you are instructed of exactly what is required from you at all stages of the purchase.

How do I transfer money to Morocco?

You can use your own bank but we can recommend consulting one of our specialist currency exchange brokers as they can be more creative and save money.

Do I need a solicitor?

Yes, you will require legal advice. You are free to appoint your own or we can recommend a UK firm that specialises in this area.

Is it possible to rent the property in Morocco out?

Of course. The reason many people invest in property in Morocco is to operate a "Buy to Let" strategy and aim to generate a good solid rental income whilst the value of their property appreciates. New buyers are exempt from property rental tax for the first 5 years. Morocco has a solid rental market with occupancy around 85% in the high season and expected to rise as Vision 2010 matures. We work closely with a Property Management Company which we can recommend for all the maintenance and renting of your property.

What are the additional required purchasing costs?

Generally in Morocco around 5% - 6% is required in addition to the property purchase price to secure your property. These fees are broken down further in the example below:

• Stamp duty: 2.5%
• Legal Fees: 1.1%
• Notary fees: 0.5%
• Land Registry: 1.5% to 2%

Are there ongoing costs besides water and electricity associated with a property purchase in Morocco?

As with most countries there are additional community fees but these are not usually expected to exceed €60 pm.

Is it possible to sell a Morocco property prior to completion?

Yes most of our developments have this written in your contracts. But this is a point that can vary from project to project so it is important to ask about this if this is an important part of your investment strategy. In most cases it is possible without any problems, sometimes there maybe an administration charge to action this option.

General

The Morocco tax system is modeled after the French system and has quite a few complexities. We always consult and work closely with our international tax advisers prior to offering our investors tax reduction strategies. The following information is a very basic guide to the Morocco tax implications for UK investors.

Please remember that the Moroccan tax system is quite complex so always get expert tax advice before making an investment.If you require further information relating to Morocco taxation, please contact us.

What is the Capital Gains Tax situation?

There is no Capital Gains Tax (TPI) if you sell after 10 years of ownership. Sales made between 5 and 10 years are subject to 10% of the profit if more than 1 million DRh (about €90,000) or 20% if sold within 5 years. There is a double tax treaty between the UK and Morocco to ensure that this is not paid in both countries.

Are there any annual property taxes?

You are exempt for the first 5 years of ownership. After 5 years you receive a 75% discount if the home is your holiday home or your permanent residence! Tax ranges from 0% - 30% depending on property value.

How much is Inheritence Tax?

It is 0% for family members. We recommend that you make a Moroccan will.

What tax do I have to pay on rental income?

Morocco offers some favourable tax options to overseas property investors. You are exempt for the first 3 years from paying income tax. After 3 years UK investors will pay income tax on 60% of the income. In Tangiers 60% of this income is taxable at 22% (other parts of Morocco are taxed at 44%). The city of Tangiers has a 50% reduction on rental income tax adding yet one more advantage to invest in Tangiers.

However, if you are an investor only, as opposed to letting your holiday home, you will pay 13.50% on the rental value of the property!

Municipality Tax (Taxe Urbaine)

(Personal vacation home option)Property taxes are paid annually. For the first five years, owners have full exoneration (Property agencies are NOT included). After 5 years the tax is based on the property's annual rental value. There is a 75% discount if the home is your permanent or vacation home residence. This is done with a graduated value tax table:

• Less than 3,000dh 0%
• between 3,001 and 6,000dh 10%
• between 6,001 and 12,000dh 16%
• between 1,201 and 24,000dh 20%
• between 2,401 and 36,000dh 24%
• between 3,6001 and 60,000dh 28%
• more than 60,000 dh 30%

Garbage Collection Tax (Fiscalite des collectivites locales)

There is a 5 year exoneration from the garbage collection tax. Tax is levied at 10% of the property's annual rental value.

Corporate Tax

If you intend to purchase a number of Moroccan properties it may well be worth considering establishing a Moroccan Private Limited Company (SARL) which can take just 3 weeks. The SARL is an intermediate type between associations of persons and of capital, bearing resemblance to both partnerships and share companies. It is always a trading company, regardless of its corporate name and its minimum equity capital is 100,000dh. It may be formed by two or more members who are only liable to the amount of their share of the equity capital in the company. Unlike a general partnership, members of a private limited company do not need to be registered merchants. The private limited company must file a memorandum of association as part of its incorporation process. The capital stock has to be fully described and paid up as the company is formed. Stocks shall have the same face value and are not negotiable; they may be transferred only through contracts. "Parts Sociales" may be transferred to third parties outside the company only with the co-associates' consent. Tangier is 50% of the tax rate in the rest of the country. Tax is currently 8.75% for the first 5 years and 17% after 5 years

With the right people assisting you, purchasing an overseas property can be an enjoyable and rewarding affair ... one, we at Property Club International are familiar with. If you still have questions having read this section, please don’t hesitate to contact us!

Some of the information in the information sections has been supplied by third parties, and Property Club International and its associated companies cannot be held responsible for any errors or omissions. Professional advice should always be sought at the time of purchase.