Moroccan Tax Authorities Crack Down on Real Estate Developers’ Tax Evasion

Several developers are suspected of circumventing the formalization of reservations in order to manipulate their declarations and avoid the tax on real estate profits. Many refuse to issue a reservation certificate in exchange for substantial down payments. This lack of legal guarantee puts customers in difficulty in case of project failure. A customer who, for example, has paid 100,000 dirhams off the books finds himself without recourse in case of a problem.

The price of economic apartments has increased, from 250,000 to more than 350,000 dirhams. Developers require an initial payment of 100,000 dirhams, the rest being included in the contract. This practice penalizes buyers in the event of a resale.

The tax audits focus on the contracts, in order to stop the accumulation of fortunes by certain developers who evade their tax obligations, despite land acquired at advantageous prices.