Moroccan tax is based on the French system and is quite complex. We strongly advise that all clients seek professional tax advice. This section is designed to give you a brief guideline to Moroccan property tax.
Every tax system is different and the Moroccan system is no exception. With its tax laws left as a legacy from the French colonial days, it is essential to have a professional guide you through the process. Each case is unique and there is no rule of thumb to go by.
Investors from the UK looking to operate a buy-to-let strategy with their investment property in Morocco will be required to pay tax on this generated income.
The first three years can be exempt of tax, but afterwards investors must pay tax on 60% of their generated income at levels between 22% and 44%.
In Tangier, for example, a buy-to-let investor would, after 3 years, be subject to a tax of 22% on 60% of the rental income from his buy-to-let investment property in Morocco.
In Morocco, property owners are required to pay an annual property tax. The first five years are exempt. After this, tax is due based on the annual rental value of the property. The table below gives an approximate guide to the taxes due:
If investors do not live in the property at all, a tax of 13.50% on the rental value is levied.
The owner of a property is exempt from the garbage collection tax for the first five years. After this period, tax is charged at 10% of the property's annual rental value.
If the property is sold within five years, capital gains tax is charged at 20% of profit with a minimum of 3% of the sale price. A property sold between six and ten years of ownership will pay 10% capital gains tax and 0% thereafter. Capital gains tax is based on the sale price less the purchase price.
There is 0% inheritance tax for family members, but it is essential to make a legal Moroccan will and seek professional tax advice beforehand. You can ask specific questions or request a call from a tax specialist by completing the small form above.
There is a double tax treaty in place between Morocco and the UK and this protects the investor from being liable for capital gains tax in both countries.
If you are considering investing in multiple property units in Morocco, it may be an idea to consider creating a Moroccan private limited company.
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