Buying an apartment in Marrakech, a riad in Fes, or a seaside villa in Agadir. Thousands of Moroccans residing abroad (MREs) and foreign non-residents do exactly this every year. Yet between signing the purchase deed and filing a tax return lies a path that many overlook, sometimes at considerable cost, according to Morgan Richez, co-founder of Morgan & James Real Estate Agency.
Property taxation in Morocco for non-residents is governed by a precise legislative framework: the annual Finance Act, the General Tax Code (CGI), and the bilateral tax treaties that Morocco has signed with some fifty countries. Understanding these rules is not optional. It is a legal obligation, and failure to comply exposes owners to tax reassessments, penalties, and potential complications when selling.
Here is how it works, tax by tax.
Who is considered a "non-resident" under Moroccan tax law?
For the purposes of the General Tax Directorate (DGI), a non-resident is any individual or legal entity whose tax domicile is located outside Morocco. In practice, this includes MREs who have not established their primary residence in Morocco, as well as foreign nationals not domiciled in the country.
The criteria for Moroccan tax residency are set out in Article 23 of the CGI: a person is considered a Moroccan tax resident if they maintain a permanent home in Morocco, spend more than 183 days per year in the country, or have their principal economic interests based there. Below these thresholds, you are classified as a non-resident.
This status has direct implications for the taxes you pay, the applicable rates, and the filing obligations to which you are subject.
Which taxes apply when purchasing property in Morocco?
Acquiring real estate in Morocco triggers several charges, regardless of the buyer’s residency status.
Registration fees represent the most significant cost. The standard rate is 4% for residential properties, calculated on the declared value stated in the sale deed (commercial and professional properties are generally subject to the same rate, though certain categories attract higher rates). These fees are payable at the time the deed is registered with the notary.
Under the 2026 Finance Act, a surcharge of 2% applies to any portion of a transaction exceeding 300,000 MAD that is not settled through traceable payment methods (i.e., cash payments or those not supported by a verifiable banking instrument). Paying by bank transfer with a clear reference avoids this penalty entirely.
Land registry fees of approximately 1.5% of the declared price are also payable for the registration of title.
Notarial fees are added to the notary’s charges, capped according to an official fee schedule. For a property valued at 2 million dirhams, notary fees typically fall between 1% and 1.5% of the sale price.
VAT on real estate applies exclusively to the purchase of new-build properties from a VAT-registered developer. The rate is 20%, though this is generally incorporated into the advertised sale price.
There is no specific additional tax burden for non-residents at the point of purchase. The differences begin afterwards.
Community services tax and residential tax: who pays what?
Every property owner in Morocco, resident or not, is subject to the community services tax (TSC), formerly known as the municipal tax, and to the residential tax (TH) if the property is used as a primary residence. Since 2025, the administration of the residential tax has been transferred to the DGI, and it can be paid online at tax.gov.ma.
The community services tax is calculated on the property’s gross annual rental value, as assessed by the tax authority based on location and surface area. The rate is 10.5% in designated urban zones and 6.5% in non-designated areas.
The residential tax is applied to the same base, on a progressive scale: exempt up to 5,000 MAD of rental value, then 10%, 20%, and up to 30% on the portion of annual rental value exceeding 40,000 dirhams.
An important point for MREs: a 75% reduction on the rental value applies to a property retained as a primary residence in Morocco, including one occupied free of charge by a close family member (spouse, direct ascendant, or descendant). Where this reduction applies, both the TH and TSC are calculated on just 25% of the rental value. A property that is rented out, left vacant as a pure investment, or used only as an occasional secondary residence does not qualify for this reduction, and taxes are due on 100% of the rental value.
In all cases, the obligation remains: not occupying the property does not remove the requirement to declare it or to pay these local taxes.
How is rental income from Moroccan property taxed?
This is often where complications begin for non-residents who let their property.
Moroccan-source property income is taxable in Morocco, whether received by a resident or a non-resident. Article 61 of the CGI subjects such income to Income Tax (IR) on a progressive scale, after a flat-rate deduction of 40% for expenses, meaning that only 60% of gross rental income is liable to tax.
Following the reform introduced by the 2025 Finance Act (unchanged for 2026), the IR brackets are as follows:
| Annual net taxable income bracket (MAD) | Marginal rate |
|---|---|
| 0 – 40,000 | 0% |
| 40,001 – 60,000 | 10% |
| 60,001 – 80,000 | 20% |
| 80,001 – 100,000 | 30% |
| 100,001 – 180,000 | 34% |
| Above 180,000 | 37% |
For a non-resident renting their Casablanca apartment at 8,000 dirhams per month, the gross annual income is 96,000 MAD. After the 40% deduction, the taxable base is 57,600 MAD. Under the current scale, the first 40,000 MAD is exempt and only the remaining 17,600 MAD is taxed at 10%, resulting in a tax liability of approximately 1,760 MAD, considerably lower than under the pre-reform brackets.
There is also a flat-rate option. Property owners may elect to be taxed at a fixed, final rate of 20% on their gross rental income; those who do so are exempt from the progressive IR on that income and from the annual filing requirement. Where the tenant is a legal entity (a company), it must withhold tax at source (10% or 15%, depending on the rent level), which is then offset against the owner’s final IR liability.
Otherwise, a tax return must be filed before 1 March each year with the relevant tax office. Non-residents are required to appoint a fiscal representative in Morocco if the administration so requests.
A note on bilateral tax treaties. Morocco has signed double taxation avoidance agreements with France, Belgium, Spain, Italy, the Netherlands, Canada, the United States, the United Arab Emirates, and around fifty other countries. These treaties may assign the exclusive right to tax to one of the two states, or provide for a tax credit mechanism. An MRE resident in France, for example, may have their Moroccan rental income taxed in Morocco but receive a corresponding tax credit in France to prevent double taxation.
What taxes apply when selling a property in Morocco?
Capital gains tax is the levy that non-residents most frequently overlook, and it can represent a very substantial sum.
Under Moroccan law, the gain realised on the sale of a property is subject to Income Tax on property profits (TPI, under Articles 62 et seq. of the CGI). The rate applicable to non-residents is 20% on the net profit, with a minimum tax charge fixed at 3% of the sale price, even where the profit is nil or a loss has been made.
The net profit is calculated as follows: sale price, less the adjusted cost price, less justified expenses. The adjusted cost price incorporates the original acquisition price, increased by actual costs (works, deed fees) and updated by an official coefficient published annually by the DGI based on the holding period.
A worked example: a property purchased for 1,500,000 MAD in 2012 and sold for 2,800,000 MAD in 2025. With the cumulative adjustment coefficient applied, the adjusted cost price reaches approximately 1,950,000 MAD. The taxable profit is therefore 850,000 MAD, giving a tax liability of 170,000 MAD (20%), subject to verification that this exceeds 84,000 MAD (i.e., 3% of the sale price).
Available exemptions for non-residents. The law provides for a full exemption where the property has served as the seller’s primary residence for at least five years (the threshold was recently reduced from six to five years), provided the sale price does not exceed 4,000,000 MAD. Above that threshold, the 3% minimum applies to the portion exceeding the limit. For non-residents, this requires having genuinely occupied the property, which is rarely the case. Other exemptions exist for certain transfers between family members (between spouses or in the direct line of descent) and for social housing under specific conditions, though their practical application is limited.
Fund transfers: a critical step for non-residents
Purchasing property in Morocco using foreign currency confers an important right: the ability to repatriate those funds abroad upon resale, in the same currency and up to the amount originally imported.
This mechanism, regulated by the Moroccan Office des Changes, is conditional on proof that the funds were imported lawfully. In practice, the non-resident buyer must ensure that the initial payment passes through an approved Moroccan bank, and must retain all supporting documentation for the currency importation (wire transfer confirmation, exchange contract).
In the event of a capital gain, only the original capital may be freely repatriated. The gain itself, once tax has been paid in Morocco, requires special authorisation from the Office des Changes before it can be transferred abroad. This step is frequently underestimated and can delay transfers by several weeks.
Inheritance and gifts: what non-resident heirs need to know
Morocco does not have an inheritance tax in the strict sense. Heirs, whether resident or not, pay no inheritance duties on real estate transmitted in the direct line or between spouses, subject to the rules of Islamic law (the Moudawana) that govern the distribution of inheritances.
That said, transfer on death is subject to registration fees at a reduced rate of 1.5% for direct heirs. The relevant formalities must be completed with the Land Registry.
For foreign non-residents who are non-Muslim, or in cases of mixed inheritances, the situation becomes more complex. Heirs may face conflicts between Moroccan law and the law of the deceased’s country of residence. The Hague Convention on international succession does not apply in Morocco. Specialist legal guidance is strongly recommended.
What are the annual filing obligations for non-resident property owners?
Owning property in Morocco without residing there does not exempt an owner from annual tax obligations.
Every owner must ensure that the community services tax and the residential tax are duly received and paid before the applicable deadlines (generally end of March and end of June, in line with the notices issued). The DGI sends these notices to the Moroccan address of the property or to the address of the designated fiscal representative.
Where the property is rented out, the annual declaration of rental income is mandatory, unless the owner has elected the flat-rate, final-discharge option of 20%, which removes this filing obligation. Where the tenant is a legal entity that withholds tax at source, the owner will generally still file a return in order to offset the withholding against the final IR due. For lettings to private individuals, both the declaration and the payment are entirely the responsibility of the non-resident owner.
To facilitate these procedures from abroad, the DGI has developed the Simpl-Revenus Fonciers portal (available at tax.gov.ma), which allows online filing and payment. Many non-residents nonetheless continue to appoint a chartered accountant or tax lawyer in Morocco to ensure full compliance.
What bilateral tax treaties actually change for MREs
Double taxation avoidance agreements (DTAs) do not all operate in the same way. Some, such as the treaty concluded with France (signed in 1970 and subsequently revised), give Morocco priority taxing rights over income and capital gains from Moroccan real estate. France then grants a tax credit equivalent to the Moroccan tax paid, eliminating the double taxation.
Others, such as the treaty with the United Arab Emirates, operate differently given the absence of income tax in the UAE. The risk of double taxation is theoretical in that context, but Moroccan filing obligations remain entirely applicable.
The treaty with Belgium provides for mechanisms similar to those under the France agreement, though Belgian tax authorities have historically taken a strict approach to foreign-source income. MREs based in Belgium would be well advised to document the taxes paid in Morocco precisely in order to claim the credit.
For non-residents whose country of residence has not signed a treaty with Morocco, double taxation may effectively apply. In that case, it is necessary to refer to each country’s domestic rules to determine whether a unilateral tax credit is available.
The most common pitfalls
- Failing to declare a rented property
The Moroccan tax authority has significantly strengthened its data-matching capabilities in recent years, notably through information transmitted by real estate agencies and short-term rental platforms such as Airbnb. Undeclared rental income exposes owners to a tax reassessment with surcharges ranging from 15% to 100% depending on the circumstances. - Overlooking the 3% minimum tax on resale
Sellers who believed they were making a loss (or no gain at all) have found themselves liable for 3% of the sale price. This minimum charge applies even where deductible costs exceed the sale price. - Settling payments outside traceable banking channels
Since 2026, any portion of a transaction exceeding 300,000 MAD settled in cash or without verifiable bank payment triggers a 2% surcharge on registration fees, in addition to the pre-existing risk of tax reassessment. - Failing to retain currency importation documentation
Without these documents, the repatriation of funds on resale may be blocked or limited, leaving the seller with funds held in Morocco in a non-convertible dirham account. - Understating the property value in the sale deed
The practice of declaring a price below the actual amount in order to reduce registration fees (known as a “double price” arrangement) exposes the buyer to reassessment and penalties of up to 100% of the evaded duties. The DGI has tightened its controls in tourist areas and major cities.
In summary: the key tax stages of a Moroccan property investment for a non-resident
At purchase: registration fees (4%), land registry fees (approximately 1.5%), notary fees (1% to 1.5%), VAT if the property is new build (incorporated into the price), and a 2% surcharge on any untraceable payment exceeding 300,000 MAD.
Each year: community services tax (10.5% of rental value in urban zones), residential tax where applicable (with a 75% reduction for the primary residence of an MRE), plus the declaration and payment of income tax on rental income if the property is let, unless the flat-rate 20% option has been elected.
On resale: Income Tax on property profits (TPI) at a rate of 20%, with a minimum of 3% of the sale price, along with the requirement to obtain a tax clearance certificate from the DGI prior to transferring funds.
Moroccan real estate taxation is neither particularly onerous nor particularly lenient by regional standards. What it is, above all, is poorly understood. And in tax matters, ignorance invariably costs more than information.
Sources:
General Tax Code of Morocco (2026), Finance Acts 2025 and 2026, General Tax Directorate (tax.gov.ma), Office des Changes du Maroc, and bilateral tax treaties available on the website of the Ministry of Economy and Finance.
