16 Juil 2023

Tax Implications for Non-Resident Foreigners Owning Real Estate in Morocco

When non-resident foreigners own real estate in Morocco, they need to consider the tax implications that arise from their property ownership. 

According to Article 23 of the Moroccan General Tax Code, individuals who do not have their tax domicile in Morocco are subject to income tax on their total income and profits from Moroccan sources. Additionally, they may be subject to taxes on profits or income that fall under Moroccan taxation as per double tax treaties related to income taxes.

In most cases, double tax treaties pertaining to income taxes specify that rental income and gains from the sale of real estate should be exclusively taxed in the country where the property is located. 

Therefore, taxes related to real estate in Morocco, including rental income, capital gains, and local taxes, must be paid in the country.

Here are the key tax considerations for non-resident foreigners owning real estate in Morocco:

  1. Income Tax : 

If you earn rental income from your Moroccan property, you are required to pay income tax on that income. The income tax rates are progressive and vary based on the taxable income brackets. Deductions are applied before calculating the tax liability.

Taxable Annual Income Brackets (MAD) Taxe Rate Deduction Amount
0 to 30 000 0 %
30 001 to 50 000 10 % 3 000
50 001 to 60 000 20 % 8 000
60 001 to 80 000 30 % 14 000
80 001 to 180 000 34 % 17 200
Above 180 000 38 % 24 400
  1. Capital Gains Tax : 

If you sell a property in Morocco, you may be subject to capital gains tax. This tax is applied to the profit realized from the sale, which is calculated as the difference between the selling price and the acquisition price. The capital gains tax rate is fixed at 20%.

  1. Local Taxes : 

Owning real estate in Morocco also entails local taxes. The Housing Tax is an annual tax imposed on residential properties occupied by owners or made available to family members. The tax rate is determined based on the rental value of the property. 

Additionally, the Communal Services Tax is levied based on the property’s location and is also calculated using the rental value.

It is important to note that certain exemptions and deductions may apply to mitigate tax obligations, such as specific thresholds for exemptions or reductions for primary residences and certain types of property transactions. 

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Disclaimer : The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Mouna KAMALI
CEO, MKONSULTING