Morocco Property Purchase FAQs

WHY INVEST IN MOROCCO? With miles of un-spoilt beaches & the same warm, sunny days experienced by other Mediterranean resorts, the attraction is clear from the outset THE ATTRACTION Property prices 50% less than other European resorts Low cost of living Beautiful Golf Courses, Tennis Clubs, & Riding Clubs Mediterranean climate Yacht club & berth fees for under £27/month 10 year build guarantee (similar to NHBC) French, Spanish & English widely spoken as well as traditional Arabic Costa del Sol is just 30 minutes away by hydrofoil once past the border Moorish culture at its best Enjoy a luxury lifestyle for very little

IT’S FINANCIAL BENEFITS
Morocco offers additional benefits from a financial standpoint which makes it a highly attractive prospect for purchasers:

• Low property taxes
• Safe investment – Notary supervised property registration similar to France & Spain
  
• Easy repatriation of investment should you re-sell in the future
  
• Only 20% tax on any capital gains
  
• Property market booming – average rises of 15% per year achievable
  
• Rental occupancy reaching 85% most years during the Peak Season
  
• 70% mortgages available with current 7% mortgage rates

IT'S CURRENCY
A Euro equals 10.8 Dirhams, & a Sterling Pound equals 16.3 Dirhams. The unit of currency is the Dirham (Dh), which is divided into 100 centimes. Business visitors are advised to consult their banks for the current rate of exchange. No import of Dirhams is allowed. Overseas visitors need to change their currency into Dirhams locally.
The Moroccan Central Bank (Bank Al Maghreb) fixes the value of the Dirham using a basket of currencies including the Euro, Dollar and Yen. The Dirham is not yet fully convertible.

MOROCCO TAXATION GUIDE
The Morocco 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 strategies. The following information is a very basic guide to the Morocco tax implications for UK investors:

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 RENTAL TAX (Taxe Urbaine) (Investor option)Investors pay 13.50% on the rental value of the property.

GARBAGE COLLECTION 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
• Repairs
• 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 GAINS

• 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.

INHERITANCE TAX

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 will!

UK-MOROCCO TREATY

There is a double tax treaty between the UK and Morocco that ensures investors do not suffer Capital Gains tax in both countries.

CORPORATE TAX

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.

• Tangier 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 always get expert tax advice before making an investment.If you require further information relating to Morocco taxation, please contact us.

10 reasons to buy your vacation home in Morocco

• Real estate prices 50% the cost of Europe
• Low property taxes
• Spectacular ocean view and beach front properties
• Moderate Mediterranean temperatures all year long
• Maid, gardener and general administrative services 10-12 Euros a day
• Exotic tourism excursions
• Yacht club and berth fees for your boat under 300 Euros a year
• Beautiful golf courses
• Tennis clubs
• Riding club

View the Morocco Property Database