WHAT IS THE PROCESS OF BUYING PROPERTY IN MOROCCO?
- Once you have decided that you want to buy a property in Morocco, it is important to choose a notaire. The notaire is like a solicitor in the UK and plays a big role in the Moroccan property buying process, so life will simply be easier if you have one arranged from the outset.
- When you have found a property that you like, you should put in a verbal offer. When this has been accepted you will need to sign a preliminary contract, which is legally binding, and pay a deposit that will range from ten per cent for a resale home, to 40 per cent for an off-plan property.
- Your notaire will then obtain the title deeds of the property. While this is relatively straightforward for a new-build home, it has been known to take up to a year for old riads, as every member of the vendor’s family needs to agree to the sale.
- Around four weeks before completion you will receive a draft of the final contract, which must be signed and returned to the notaire. The signing of the final contract itself must happen in front of the notaire, although if you are unable to travel to Morocco, you are able to sign over power of attorney for someone to sign on your behalf. When the final contract is signed the remainder of the balance is due, including any fees and taxes.
WHAT FEES CAN BE EXPECTED DURING THE BUYING PROCESS?
- When buying property in Morocco you will need to budget for 2.5 per cent estate agency fees, 2.5 per cent stamp duty / registration tax, as well as 0.5 per cent notary tax. You will also be liable for annual local taxes (similar to our council tax), but these are relatively low.
- Estate agency fees are paid by property buyer’s and owners in Morocco (based on the French system) and are higher than the UK because there are fewer real estate transactions.
For the purchaser:
Every purchaser will be obliged to pay the below taxes & expenses to complete the legal process on his/her purchase.
All percentages are based on Moroccan recording price.
Part I Registration: 2.50% Notary Tax: 0.50% Guarantee of Repatriation: 2,500 MAD Title Deed Registration 1.00% + 75 MAD Property Certificate: 75 MAD Stamps & Issuance 1,500 MAD Office of Exchange Paperwork
(international buyers only)
1,500 MAD Total Part I —- Part II Notary Fee 1.00% Notary Fee TVA 20.00% of 1.00% Total Part II —- Sum of Parts I & II
For the seller:
If an owner were to sell his/her property after completion there are also various taxes and fees associated with a sale here in Morocco. I’ve provided a list below with more details.
Capital Gains Tax: 20% Capital Gains Tax or 3% of Sale Price
Capital Gains Tax (Taxe sur les Profits Immobiliers – TPI)
Capital gains tax is 20% of profit with a minimum of 3% of the sale price. TPI is based on the sale price less the cost basis.
Cost basis may be calculated by adding the following to the Moroccan recording price in your acte de vente:
Notary fees and tax
Inflation (based on a government table)
The second option in calculating the cost basis is just to add 15% to the recording price plus the inflation rate and credit expense. This option is more frequently. The seller must pay the TPI within 30 days of the sale.
The TPI IS EXONERATED IF THE APPARTMENT IS OCCUPATED AS A PRINCIPAL RESIDENCE FOR AT LEAST HEIGHT YEARS.
Government Community Tax: 10% of Annual Rental IncomeNotaire Fee: 7,000 dh Agency Fee: The agreed commission plus VATSyndic Fees: TBD by SyndicCertificate Fee: 100 dh