Buying Property in Morocco - A guide to real estate Investment in Morocco
Ongoing Costs
Running Costs
It is important to hold a local currency bank account, both to set up initial services connections and for paying bills. The local currency is the Dirham (Dh) or MAD in international currency transactions. You must open a convertible Dh account with a Moroccan bank to allow the transfer of monies into the country and to repatriate money in the future from rental incomes or profit realized during a later sale of the property.
Electricity and Water:
Your combined electricity and water bill is likely to be in the region of 100Dh per month depending on consumption. In Morocco domestic water and sanitation tariffs are progressive, rising with each “block” of consumption. Starting with the assumption that the level of consumption is a function of household income, this system keeps prices relatively low for small consumers connected to the network (the price for the first “block” is below production costs in Morocco, and is only about 25% of delivery costs.)
Waste water:
The water price includes a component to cover the costs of wastewater collection and treatment, in accordance with the “polluter pays” principle, in order to protect public health and the environment (including water sources) from pollution and to allow the recycling of wastewater.
Property Insurance:
You can insure your property against loss through fire, flood and natural disaster. Domestic property insurance rates vary depending on the location and value of the property. Each property is generally valued by the insurance company before a quotation can be provided.
Capital Gains Tax:
Capital Gains Tax (TPI: Taxe sur Les Profits Immobilier)
The tax is set at 20% of the gain with a minimum of 3% of the selling price. Foreign owners are exempt from this tax under certain circumstances:
• The property has been sold after 10 years of ownership, or
• The gain is under 1,000,000 Dhs (c.62500GBP), or
• The property has been sold after 5 years if it has been the vendor’s main dwelling place for that period and , the gain is under 1,000,000 Dhs (c.62500GBP), or
• The property has been sold after at least 8 years if it has been the vendor’s main dwelling place for that period and , the gain is over 1,000,000 Dhs (c.62500GBP)
You are taxed at 10% on the gain if you sell between 5 and 10 years of ownership
Inheritance Tax
Inheritance tax between family members is levied at 0%.
Mortgages
The Moroccan mortgage market is very similar to the French market, with up to 70% of the purchase price available spread over 15 years, although UK or US based mortgages are available on Moroccan properties.
Cautionary Notes
Whether you are buying property in England, the USA or abroad there will always be potential risks. Morocco is no different. You need to consider the following questions:
• Does the property have good title?
• Does the owner actually own it?
• Is the land/property clear of outstanding debts?
• Has the building been constructed legally?
• Do you understand the contract of sale?
