Morocco Tightens Real Estate Tax Regulations for Investment Properties

This circular concerns the obligation to submit requests for registration of mortgage contracts concluded in favor of the State, as a guarantee of the payment of the value-added tax relating to investment properties, to the land registry fees, in accordance with the provisions of Decree No. 2.16.375 setting the tariff of these fees. The Governor General has taken care to remind the land registry conservators of the provisions of the General Tax Code, in particular paragraph 6 of paragraph 7 of Article 92 and paragraph 22A of Article 123, in accordance with the amendment introduced by Article 6 of the Finance Act for the year 2024.

This legislative framework stipulates that taxpayers benefit from an exemption from value-added tax on the occasion of operations for the acquisition or importation of investment goods, subject to the conditions defined in the said code and provided that these persons provide sufficient guarantees in accordance with the legislative and regulatory texts in force, explained the second in command of the National Agency for Land Registry, Cadastre and Cartography.

According to him, one of the main guarantees that can be put in place is to allocate a titled real estate property as the object of a mortgage and pledge in favor of the State (Directorate General of Taxes), as a guarantee of the payment of the amount subject to the exemption in case of non-compliance with the legal conditions.

This decision follows an approach by several conservators. The latter had sent requests for clarification to their direct superior on the possibility of exempting mortgage contracts concluded in favor of the State, before the obligation to pay the due fees was settled. The current legislative framework does not provide for any explicit exemption, as this is an exception that must be expressly provided for by a clear legal provision, it is specified.

The Governor General has also sent another circular to the land registry conservators regarding the tightening of the collection of land registry fees and taxes. They have been instructed to verify the zoning code where the real estate property subject to a request for deposit or registration in the land registers is located, when it is a contract of transfer free of charge or for a symbolic one dirham. The competent cadastre service must assist them in carrying out this task. The transfer contract must be submitted to the guide of commercial values of real estate properties adopted by the National Agency for Land Registry in accordance with Article 30 of the Decree of July 14, 2014 relating to land registration procedures, it is specified.