Morocco: Their villa suddenly triples in value, and developers want to push them to sell

When a neighborhood reserved for villas is rezoned to allow buildings of four or more stories, the land immediately acquires much greater development potential.

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In certain sought-after areas of major cities, its value can then exceed 20,000 dirhams per square meter. The owner thus benefits from a substantial latent capital gain, even if they continue to occupy their home normally.

Some choose to keep their villa while waiting for prices to rise further. For developers, this strategy ties up plots that have become developable in cities facing a shortage of land.

According to Assabah, real estate professionals are informally discussing with officials from the Ministry of Economy and Finance the creation of an annual charge targeting these properties.

A tax to unlock the land

The measure would be modeled on the tax on undeveloped urban land. It would concern villas located in areas now open to the construction of buildings, when their owners undertake neither a sale nor a conversion.

The aim would be to make the prolonged retention of these properties more costly in order to encourage their return to the market. Discussions are still focused on how the tax would be calculated, collected, and which administration would be responsible for collecting it.

No measure has been adopted. At present, the capital gain created by the new zoning is not subject to any specific taxation as long as the owner does not sell the property. Nor is the owner required to demolish the villa in order to exploit the new construction possibilities.

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The proposal therefore opens a sensitive conflict between owners’ right to keep their homes and developers’ desire to free up land that has become highly profitable following the zoning change.