Moroccan Expats: 75% Tax Break on Home Ownership, But Time is Ticking

– bySaid · 2 min read
Moroccan Expats: 75% Tax Break on Home Ownership, But Time is Ticking

Moroccans residing abroad can benefit from deductions on the housing tax and municipal services. Provided they take certain steps within the deadlines, and the housing meets the defined criteria.

A property located in Morocco, whether it is the main or a secondary residence, is subject to the housing tax. This is calculated based on the rental value of the property, determined by comparison by the census commission. This rental value is revised every five years, with an automatic increase of 2%.

Moroccans residing abroad benefit from a 75% deduction on the rental value for their property considered as their main residence. This deduction also applies when the property is occupied free of charge by the owner’s spouse, children or parents.

A five-year exemption from the housing tax is granted from the completion of the work, provided that the construction is used as the main residence. This exemption does not apply to secondary residences or other uses.

The housing tax scale is defined according to rental value brackets. No tax is due if the annual rental value is less than or equal to 5,000 dirhams. The following brackets are taxed at 10%, 20% and 30%, with 500, 2,500 and 6,500 dirhams respectively to be deducted from the gross tax amount.

In the event of new construction or addition of construction, the owner must declare the completion of the work no later than January 31 of the year following the end of the work. A change in the use or ownership of the property must also be declared within the same time frame.

When a building is vacant due to major repairs, or intended for sale or rental, the owner or usufructuary must file a vacancy declaration during the month of January of the year following the vacancy. This declaration serves as a request for exemption from the housing tax. It must include the composition of the vacant premises, the period concerned and the reason for the vacancy, with supporting documents.

In addition to the housing tax, a municipal services tax is payable on all buildings, regardless of their use. For housing used as the main residence by MREs, a 75% deduction on the rental value also applies.

The municipal services tax rate is 10.50% for premises located in urban perimeters, defined centers and summer, winter or thermal resorts. This rate is reduced to 6.50% for premises located in the peripheral areas of urban municipalities.

The declarative obligations with regard to the municipal services tax are identical to those provided for the housing tax. However, no five-year exemption is granted for new constructions.