Morocco’s New Real Estate Tax Rule Sparks Controversy and Delays Transactions

The measure aims to establish more rigor and transparency in the real estate sector. But it is not gaining the support of the players. For economic operators, it adds to the administrative procedures and creates additional costs. "We have commitments with buyers who are backing down in the face of overly long transfer deadlines and with bankers who don’t care about bureaucratic hassles and penalize us financially," confides to Challenge a real estate developer who claims that "this issue concerns everyone and penalizes everyone."

As for the notaries, they consider this measure too constraining, even though it "has always existed," as a notary, a former member of the national chamber of modern notaries, recalls. This measure "has always been scrupulously applied by the notaries, under penalty of tax solidarity, so that the taxpayer’s tax was paid before any financial transaction," he confirms, specifying that "before concluding a transaction, we always made sure of the lightness or heaviness of the land and tax file, because it was important for us to ensure that the spirit and the letter of the law were respected."

Where the shoe pinches with the new measure, he explains, is the fact that the tax management of real estate transactions, formerly entrusted to a tax inspector, is now entrusted to the Treasury. Inexperienced in this matter, the Treasury agents "take a long time to respond and when they do, it is often to say that it does not depend on their skills or that such and such a document is missing, which, however, is in the file," explains the notary, deploring that sometimes a file "takes two and a half months, and even more, without succeeding."

To overcome this difficulty, notaries would have been asked to finalize these files at their level before submitting them to the Treasury, informs the notary who sees in the application of this measure "a masquerade in which notaries, real estate operators and Treasury officials are struggling against their will." He deplores "the lack of intelligence in the process of applying this law," recalling that notaries have always collected the tax.