Nadia Sadak, Sunday, 3 November 2013
This article is part of a series of 8 articles about buying property in Morocco. The other articles in the series cover the following topics:
The taxes to be paid when purchasing a property in Morocco should be well analysed, that way buyers, sellers and also the government would not have
face any issues during the transaction and property transfer. There are a few taxes that need to be paid following the correct order of purchase. The
first tax that you should pay once you are buying a property in Morocco is called the Complete Due Diligence
. It is important to
keep in mind that all taxes when buying a house should be paid by the buyer, never by the seller or even the government or any other entity like it
may happen in some countries. All of the below taxes are the taxes on the sale of every property.
The Capital Gains Tax
Complete Due Diligence
At the cost of MAD 75 the Complete Diligence must be completed by a notary. This document will be proof that who sells the property is not in any
state of insolvency, receivership or even liquidation. The notary will then verify whether there is any open file that is proof that the land is
rental or even truly owned by the seller. In case there is no issue on this step you may move to the next one. The process usually takes a single
business day to have its completion done.
- "Attestation Fiscale" from Regional General Tax Authority
This second step on the process usually takes up to 15 business days and has its value vary from place to place. Here the buyer will be able to know
whether the property he intends to buy is due with its taxes before the tax collection authority. In case there are any sort of outstanding taxes it
is the obligation of the notary to be sure that the transaction money will be enough to pay off such debts. Such act is mandatory.
- Tax Clearance Certificate/Municipal Tax Authority (Urban Tax)
Before someone has a new property transferred under his name it is a must that this type of tax is paid. It is under the responsibility of the notary
that the property is checked before the process is completed. The process usually only takes 2 business days (or less) and has its cost vary from
region to region.
- Council or Local Tax
Proof that the supplementary urban tax was paid by the seller before selling a property must be provided. The values that should be paid are based on
the rental value of each and every property.
10% of rental value if in urban districts.
6% of rental value if in outside the urban districts
- Sales Contract signing/ Authentication by Official Notary
This process usually takes no more than a single business day and costs from 0.5% to 1% of the total transaction value. Extra notary fees also must
paid. The fee value is around 600 dirhams in stamps (around 20 dirham per page, 5 pages usually, 6 copies). Such documentation must include the sales
agreements signed by both parties, IDs of each party and also an extra 10% of the VAT on notary fees. The VAT (Value Added Tax) , which is a type of
consuming/ transactions tax.
- Registration before the Regional Tax Authorities
This part of the process is usually the slowest one, taking around 30 days until is completion is released. The cost of this tax is 4% of the total
value of the property.
- FinalTax Clearance from the Regional Tax Authority
Usually done in a single day and under different values, this step of the process shows that the seller cleared all of his taxes.
- inscription of the land on the Land Registers
This process may take up to 3 business days and usually costs MAD 75 and 1% of property value and 450 MAD for the stamp duty.
Every individual earning money from selling their property has the obligation to pay certain amount of tax on property profits. The sale of property
is taxable at 20% of any profit being that 3% of the sale price must be paid. However if the property sold was the residence of the taxpayer he will
not be subject to taxes under a few qualifications:
Yearly Property Taxes
- the property was the residence of the taxpayer for 8 years at the least
- if the property does not exceed 100 square meters and the profit, profit did not exceed MAD 250,000 and the property was the residence of the
taxpayer for at least 4 complete years
Such tax applies to buildings of all kinds, including buildings that are partially occupied by their owners. Whether it is the main home or the
home, everyone must pay the Yearly Property Tax. Whether the property is for business purposes or residence properties, every owner must pay tax. The
urbane taxes differ from the type of land. Plots of land pay 3%, buildings 4% among others. The first 5 years that the owner has a house he will have
the opportunity to have full exemption for 5 full years. After these 5 years are done the property tax is based on the annual rental value of the
property, and there is still a 75% discount if the property is the permanent home of the taxpayer in all places in Morocco.