City taxes

Dwellings, whether they are main places of residence or second homes, are subject to city taxes. The tax is assessed on the rental value of the property. The tax is increased by 2% every five years.

   Rates of taxation :

City tax brackets based on rental value of the property
     - 0 to 3,000 dhs 0%
     - 3,001 to 6,000 dhs 10%
     - 6,001 to 12,000 dhs 16%
     - 12,001 to 24,000 dhs 20%
     - 24,001 to 36,000 dhs 24%
     - 36,001 to 60,000 dhs 28%
     - Over 60,000 dhs 30%

City taxes do not apply to new premises or extensions to premises for five years. Moroccan citizens resident abroad are assessed for property tax with a reduction of 75% on the rental value of their properties in Morocco.

   Municipal Council Tax :

As well as city taxes, there is a municipal council tax to be paid on all buildings, whatever their purpose.
If the property is a main place of residence, there will be a reduction of 75% as with the city      taxes.

   Rates of taxation :

     - 10% of the rental value of premises located in an urban area.
     - 60% of rental value of premises located in areas outside an urban area.

   Rental Income :

If you buy a property that is already rented out to tenants, or if you decide to rent your property or make it available free gratis to anyone other than your parents or your children, you must declare your rental income to the tax authorities as they will be taxed as part of your income tax (known as IGR in Morocco).

Schedule of the IGR:
        Annual income
          - from 1 to 20,000 dhs exempt from income tax
          - from 20,001 to 24,000 dhs taxed at 13% (personal allowance: 2,600dhs)
          - from 24,001 to 36,000 dhs taxed at 21% (personal allowance: 4,520dhs)
          - from 36,001 to 60,000 dhs taxed at 35% (personal allowance: 9,560dhs)
          - above 60,001 dhs taxed at 44% (personal allowance14,960dhs)

However, for new construction and additions to buildings, you are exempt from paying the First 3 years following the completion of the work of the so called constructions.

Tax on capital gains :
The gain is the difference between:
- The sales price, out of the costs of disposal, and the purchase price, plus the acquisition costs, investment expenditures made and the interest paid under wage credits related to the property.

The reimbursement rate is 20%.

However, the amount of tax due may not be less than 3% of the sales price. Terms of total exemption of this tax in the following cases: (New Provisions Act Finance from 2005)
- Profit made on the sale of occupied housing as a primary residence for at least 8 years, regardless of the sales price.
- Profit made on the occasion of the first sale of social housing.
- Profit made by any person who performs in the calendar year of sales of real estate The total value of which does not exceed 60000 DH
- Profit on assignments gratuitously on the ascending and descending between spouses, between siblings This exemption extends under the same conditions:
- The spouse or direct successors who continue to live in the building or part of The building in question after the death of the owner
- The owner whose property right on his main residence consists of actions or nominative shares in a transparent property company
- Moroccan residing abroad for their main residence in Morocco

   IMPORTANT :

You must take out a total annual income under your income earned the previous year, no later than March 31 of each year, and this, in order to avoid fines or penalties for late payment.

Transfer investment income

Under the convertibility of foreign investment, authorized intermediaries are entitled to transfer to the profit of interested investors, the income generated from their investments in Morocco, such as:
- Dividends or share of profits distributed by the Moroccan companies;
- Tokens of presence;
- The profits of branches of foreign Moroccan companies;
- Rental Income;
- The interest earned on loans and deposit accounts of associates made pursuant the foreign exchange regulations in force.

These incomes can, of course, be transferred without limitation in the amount or in the time after payment of taxes in force in Morocco.

In addition, the undistributed profits and assigned to a "carried forward", "Reservations" or "provisions" can be reintegrated in the profit to be distributed under an upcoming fiscal year and transferred later.

For the transfer of these revenues, Moroccan enterprises must submit to the intermediary chartered in support of transfer orders, documents and records provided in Annex II.

The intermediaries are required to transmit to the Changes Office once the realizations of transfers, an execution summary.