Moroccan Expats Face Hidden Tax Hurdles on Homeland Properties

"Fixed-term declarations, tax deductions, temporary exemptions: mastering these rules becomes essential to avoid penalties and optimize the management of one’s real estate assets," indicates the daily L’Économiste. In terms of local taxation, MREs benefit from a 75% deduction on the rental value used as the basis for calculating the housing tax and the municipal services tax. This reduction applies if and only if the housing is occupied free of charge by the MRE’s relatives (spouse, children or parents residing in Morocco).

The rental value of the property used as the basis for calculating the housing tax increases by 2% every five years to adjust to market developments. "Furthermore, new constructions used as a primary residence enjoy a temporary exemption from this tax for a period of five years, from the date of completion of the work," adds the publication.

According to the tax guide dedicated to MREs, recently published by the Directorate General of Taxes (DGI), owners carrying out new constructions or extensions are required to file a declaration with the DGI no later than January 31 of the year following the one in which the work was completed. This deadline also applies in the event of a change in the use of the building or a change in ownership. "When a dwelling is unoccupied due to major repairs, or because it is for sale or rent, the owner must inform the tax administration before January 31 of the following year," it is specified.

Unlike the housing tax, the municipal services tax does not benefit from any temporary exemption and must be paid once the property is identified. MREs are entitled to a 75% deduction on the rental value. The local tax rate is set at 10.50% of the rental value for properties located within the perimeter of urban municipalities, as well as in defined centers and summer, winter or thermal resorts. It is 6.50% for real estate properties located in the peripheral areas of urban municipalities.