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  Morocco Property Investment

Trends in the Real Estate market:
Morocco is presently a distinctive place for property investors and presents the opportunity to purchase property early in an emerging market at prices highly favorable to most other destinations. The sense of security for investors is what is special about the property market in Morocco. Tourism is increasing at a high rate and buy-to-let investors are reporting 85 per cent occupancy rates during the peak seasons. Also simplified and further legitimized is the entire property buying and ongoing ownership rules, as well as laws and processes. 

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Investment property in Morocco is becoming more and more popular with international property purchasers because it offers a distinctive investment opportunity with exceptional capital growth forecasts in the region of 15 to 30 per cent (Homes Overseas Magazine reports 30 per cent). This capital growth is likely to continue.  A large budget (7 to 10 billion euros) has been allocated to boost tourism by 10 million visitors per year by 2010. King Mohammed VI is intent on getting Morocco on the map for tourists. Vision 2010 is a project he has developed with his ministers and advisors which aims at increasing tourism to 10 million by the year 2010. Presently there are more than 30 very high standard 18-hole golf courses. Through Vision 2010 more golf resorts are planned. Billions of dollars are being invested in order to improve Morocco’s infrastructure. Airports, high-speed trains, roads, a new electricity system, and even a tunnel to connect Spain and Morocco are among projects being undertaken. Funded by Morocco, Spain and the EU the tunnel is a joint project due for completion in 2010.

These investments along with the creation of several tax advantages help investors feel at ease in investing in property in Morocco. The open skies policy, in effect since January 1, 2006, has helped raise tourism by making it easier for low cost airlines to service destinations in Morocco and creating competition which brings down the cost of airfares. With increased tourism comes an increased need for rental properties and good news for buy to let investment in Morocco.

Practical Advice:

Once a buyer has decided on a property it is usual to negotiate the asking price and make an offer to buy.  When an offer has been accepted a deposit of about 10 per cent can be paid.  The deposit should remove it from the market place and secure the property. It’s important to stress the fact that no deposit should be paid until the investor’s lawyer can determine if the property’s title deeds are in order.  This can take some time; however, is worth the wait as there is no central land registry in Morocco and properties are often inherited by multiple parties and all parties have to officially give consent for a sale to take place.  All of this paperwork must be in order prior to a sale being closed and a buyer should have the legality of the potential sale confirmed before handing over any money. The entire process of determining who has the right to sell (and other issues) is much simpler with new properties in Morocco. 



An investor considering property in Morocco should budget for an additional 7 or 8 per cent above of the purchase price for fees and taxes.  The real estate agent’s fee will be around 2.5 per cent, the public notary will be 1 per cent to inspect the title deeds on older properties (a process that can take up to 2 years after the sale has completed; yet, will result in the property being worth more in the long run as future buyers will not have to go through the same process), and finally there is a tax of around 4.5 per cent of the purchase price on property for sale in Morocco. 

But can foreigners legally purchase property in Brazil? After all, some of the world's most desirable countries don't allow foreigners to purchase land or houses. (Thailand and Bali come to mind.) The answer is yes. In Brazil foreigners have the same legal footing as Brazilians when it comes to buying property.

Tax Highlights:

Capital Gains Tax
If the property is sold within five years, capital gains tax is charged at 20 per cent of profit with a minimum of 3 per cent of the sale price. A property sold between six and ten years of ownership will pay 10 per cent capital gains tax and 0 per cent thereafter. Capital gains tax is based on the sale price less the purchase price.

Garbage Collection Tax
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 per cent of the property's annual rental value.

Property Tax
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. 

Property Rental Tax
If investors do not live in the property at all, a tax of 13.50 per cent on the rental value is imposed.

Tax on Rental 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 per cent.

No VAT is charged on the purchase of a house or land, however, VAT will be charged on the notary and government registration fees, or if you are buying a property off plan.

Credits & Mortgages:

The maximum mortgage in Morocco is 50 per cent of the total purchase price or valuation. The purchase can be paid in Euros, Dollars or Sterling. The normal maximum period for mortgages in Morocco is 15 years, however can be negotiated. The term cannot be extended beyond the normal retirement age. Interest is negotiable at about 7 to 8 per cent, and proof of income is required.