The Government incentives
to UK buyers include:
0% tax on rental income for the first 5 years
0% capital gains tax if profit is under the £40K
or after 10 years of ownership
0% inheritance tax when a property passes to a family
100% repatriation of funds when you sell
THE MOROCCAN TAX SYSTEM
The Moroccan 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
The following information is a
very basic guide to the Morocco tax implications for
BUY AND HOLD/LET STRATEGY
PERSONAL INCOME TAX
ON RENTAL INCOME (IGR)
UK investors utilizing a buy let strategy
will be responsible to pay tax on this income. In
Tangier 60% of this income is taxable at 22% (other
parts of Morocco are taxed at 44%). The city of Tangier
has a 50% reduction on rental income tax adding yet
one more advantage to invest in Tangier.
There is also a three year exoneration
for the first three years the property is owned.
PROPERTY TAX (Taxe
Urbaine) (Personal vaction home option)
Property taxes are paid annually. 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.
This is done with a graduated tax
< 3000 dh 0%
between 3001 and 6000 dh 10%
between 6001 and 12000 dh 16%
between 1201 and 24000 dh 20%
between 2401 and 36000 dh 24%
between 36001 and 60000 dh 28%
> 60,000 dh 30%
There is a 75% discount if the
home is your permanent or vacation home residence.
PROPERTY RENTAL TAX
(Taxe Urbaine) (Investor option)
Investors pay 13.50% on the rental value
of the property.
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.
BUY AND SELL STRATEGY
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 purchase price.
Purchase price includes the following:
• Credit expense
• Registration cost
• Notary fees and tax
• Brokerage fees
• Inflation (based on a government table)
The second option in calculating
the purchase price is to just add 15% to the purchase
price. This option is often used in the case that
invoices are not available to justify the expenses.
EXONERATION FROM CAPITAL
The property is sold after owning it for
more than ten years.
The property is owned for more than 5 years but less
than 10 years. In this case the TPI tax 10% of any
capital gain over 1 million dirhams.
This tax is 0% for family members. Expert
advice should always be obtained prior to implementing
any inheritance tax planning strategies.
The most important piece of advice
we can offer on this subject is – make a Moroccan
There is a double tax treaty between the
UK and Morocco that ensures investors do not suffer
Capital Gains tax in both countries.
If you intend to purchase a number of Moroccan
properties it may well be worth considering establishing
a Moroccan Private Limited Company –The private
limited company (SARL) (Setup time is about 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 100,000
dh. 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.
is 50% of the tax rate in the rest
of the country.
• 8.75% for the first 5 years
• 17% after 5 years
Again remember that the Moroccan tax system is quite
complex so alway get expert tax advice before making