Morocco’s Hidden Tax Rule: MREs Face Surprise Charges on ’Free’ Family Rentals

In other words, if a Moroccan residing abroad makes their home available to their parents, children or spouse, without receiving rent, this occupancy is not considered to generate taxable income. No declaration or taxation is therefore required in this regard.

However, if the same home is made available free of charge to a brother, a friend, a cousin or any other person outside the direct line, it becomes fiscally assimilated to a rented property. In this case, the MRE owner is subject to income tax, even in the absence of actual rent. This is the principle of deemed acquired income.

When a property is subject to property tax, the owner benefits from a flat-rate deduction of 40% on the gross rental income, before applying the progressive income tax scale. This scale is established by brackets, with rates ranging from 0 to 37%, depending on the net taxable income.

It is therefore essential for MREs owning a property in Morocco to declare the exact nature of the occupancy of the home. A direct family relationship (parents, children) exempts from taxation. Any other situation, on the contrary, requires declaring the rental income, even if it appears to be zero. Respecting this distinction has a direct impact on the applicable tax burden.

This rule, although simple, is often unknown. Yet, it determines the obligation or not to file an annual declaration of global income before March 1st, as well as the amount of tax that may be due. The 2025 tax guide makes this clear without ambiguity.