Morocco’s New Tax Certificate Requirement Stalls Real Estate Market

"The proof of ownership, the occupancy permit, a copy of the national identity card of the future seller(s) taxpayer(s), the draft deed of sale or promise, or even the certificate of ownership... are all documents that the tax administration has been demanding since July 1, 2024, in addition to a request in the form of information to be filled in on a dedicated website, in order to obtain, in return, the famous tax certificate provided for in Article 95 of the 2011 Public Debt Collection Code," explains Me Mohamed Lazrek, notary and former secretary general of the Order of Notaries, to Médias24.

He notes that "while this procedure aims to increase the state’s revenue, in practice it seems to be dangerously slowing down the completion of real estate transactions" in Morocco. The notary adds that Article 139 of the 2024 Finance Act penalizes both notaries and taxpayers. According to this provision, notaries "must refuse to draw up sales contracts without this tax certificate". A measure that is not bad in itself, he believes, stressing that this document "can be requested by notaries electronically, which is a good thing since the process can be smoother. However, the tax administration must follow up on the other side, to avoid blockages, and this is one of the main problems we have been facing for about a month".

Me Mohamed Lazrek deplores the length of time it takes for the tax administration to process requests, which can take "a week" or even "months", which "impacts the sales process, and consequently, the state’s revenue, which is supposed to improve with the implementation of these provisions". The notary denounces the fact that the tax certificate is now linked to the seller and not to the property to be sold, as provided for in the previous legal provisions. "The owner must pay his own money before hoping to sell his house or land," which is likely to push many taxpayers to give up selling their property, "given all the charges they will have to pay before the sale contract is drawn up," he details.

As for the notaries, this new legal requirement may force them to "abandon the transaction in the face of the refusal to have the mortgage on the property released," or "pay the tax in advance of the land registration, taking the risk of engaging their professional and criminal liability," which could lead the buyer to "invoke breach of trust," Lazrek develops, adding that the notaries have found a solution to get around this difficulty: "The seller’s property is encumbered by a conventional mortgage registered in favor of a bank... In practice, the notary proceeds to register his sales contract, accompanied by the bank’s mortgage release, and then proceeds to pay the amount promised to the bank before paying the balance to the seller".