Tax planning in Morocco

Which are the taxes applied to property?
Capital gains of 20% applies if the property is sold within 5 years, 10% if sold within 10 years and 0% capital gains is incurred if the property is sold after 10 years.

Inheritance tax does not apply if the property is left to a family member.

There is no annual property tax paid for the first 5 years, after this the tax payable relates to the amount of rental income received by the property owner.

The Tax on Conveyance, transfer and registration of real estate was recently reduced from 5% to 2.5% of the property’s value and the rules were simplified by combining multiple tax regulations into one source, making compliance easier.

The taxes on documented legal procedures (Stamp Duty) are imposed on the value of the transaction at a rate of 0,25% or 0,5%, depending on the nature of the act, the carrying out and the conveyed value.

In Morocco the Value Added Tax (VAT) of 14 % applies to building and construction activities.

In Morocco, the Capital Gains Tax is 20% of the profit with a minimum of 3% of the sale price. If you sell your property after ten years of ownership, you are fully exempt from Capital Gains Tax. Owners who sell their property after five years but within ten years are subject to Capital Gains Tax of 10% of any capital gain over 1 million Dirhams (65.000 €).

There are no death duties as long as the property stays within the family (0% inheritance tax). There are double tax treaties with some countries to ensure that Capital Gains Tax is not paid in both countries. There is a 100% repatriation of funds when you sell the property.

Owners of real estate are subject to urban property tax on the rental value of the property. The general urban property tax rate is 13,5 % of the rental value (not on the purchase price). It must be paid each year.

The tenants of rented property are subject to a municipal tax on the value of the property. The rate is 10% of the normal rental value of the buildings located within the urban areas and 6 % of the normal rental value on peripheral zones of urban communes.

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