Information on the Banking System and Taxes in Morocco

Bank financing

To obtain a bank loan for the acquisition of residential property, it is necessary to provide the same documents as in your country of origin. However, financing generally does not exceed 50% of the amount, with a maximum debt ratio of 30%. Interest rates vary between 6 and 7%.

Mortgage and Transfer of Funds

The best solution is to mortgage the property in your home country and transfer the funds to Morocco. To do this, the money must pass from a foreign account to a Moroccan account, indicating the reason for the transfer: the purchase of real estate. You will have to provide a form N°2 to the Office des Changes, which will assign a necessary order number in the event of resale. You will also need to request retransfer authorization from the notary. The bank issuing the transfer must specify the origin of the funds.

Taxes

Urban Tax

The urban tax applies to main or secondary dwellings and is based on the rental value of the dwelling. The rental value is reviewed every five years with a 2% increase.

Applicable rates:

• 0 of 3000 DH : 0%
• 3001 of 6000 DH : 10%
• 6001 of 12 000 DH : 16%
• 12 001 of 24 000 DH : 20%
• 24 001 of 36 000 DH : 24%
• 36 001 of 60 000 DH : 28%
• Over 60,000 DH: 30%

New premises and construction additions are exempt from urban tax for the first 5 years. Moroccans residing abroad benefit from a 75% reduction on the rental value.

City Tax

In addition to the urban tax, you will also have to pay an aedility tax on buildings, regardless of their use. If the building is intended for the main residence, you benefit from a 75% reduction similar to the urban tax.

Applicable rates:

• Premises located in urban municipalities: 10% of the rental value
• Premises located in the peripheral areas of urban municipalities: 60% of the rental value

Rental income

If you buy an already rented property or decide to rent your residence to people other than your parents or children, you must declare the rental income. This income is subject to general income tax (IGR).

IGR scale:

• Annual income from 1 to 20,000 DH: exemption from IGR
• From 20,001 to 24,000 DH: tax at the rate of 13% with an allowance of 2600 DH
• From 24,001 to 36,000 DH: tax at the rate of 21% with an allowance of 4520 DH
• From 36,001 to 60,000 DH: tax at the rate of 35% with an allowance of 9560 DH
• 60,001 DH and more: tax at the rate of 44% with an allowance of 14,960 DH

For new constructions and additions to constructions, you are exempt from IGR for the first 3 years following the completion of the work.

Capital gains tax

Capital gains tax applies to the difference between the sale price and the acquisition price of the property, taking into account the costs and expenses related to the transaction.

The tax rate is 20%, but the amount of tax due cannot be less than 3% of the transfer price. However, there are conditions for total exemption from this tax in certain cases, such as the sale of a dwelling occupied as the main residence for at least 8 years, the first sale of social housing, assignments whose total value does not exceed 60,000 DH, and assignments free of charge between ascendants and descendants, between spouses or between brothers and sisters.

These exemptions also extend to spouses or direct successors who continue to live in the building after the death of the owner, to owners whose ownership of their main residence consists of shares or registered shares in a transparent real estate company , as well as to Moroccans residing abroad for their main residence in Morocco.