Real estate in Morocco: a reform of housing associations to boost the sector?

"Long considered as promising alternatives to traditional real estate, real estate associations and housing cooperatives now seem to be losing momentum, even though they could be a major lever to revitalize the housing sector," analyzes Finances News Hebdo. With their tax advantages, these structures offer the possibility of reducing the cost of housing production, facilitating access for certain socio-professional categories such as teachers, lawyers, bankers or customs officers.

The magazine recalls that "historically, these initiatives have been attractive because of their non-profit association model. Exempt from corporate tax, VAT and other taxes, they stand out from traditional real estate developers, whose primary objective remains profitability." But in reality, many real estate projects are experiencing significant delays in implementation, due to disputes between members or non-payment of contributions within the deadlines, or difficulties in managing construction sites.

On this subject, Mohamed Alaoui, a real estate expert quoted by the magazine, explains that "housing associations are no longer appreciated as before for reasons of trust. Several cases have even been brought before the courts, which tarnishes the image of this system and slows down its development." For their part, real estate developers cry foul, denouncing practices consisting for some of these structures to exploit their status as an association to benefit from tax advantages, which creates huge losses for the State.

Despite these difficulties, housing cooperatives can play a key role in reviving the sector if a clear legal and regulatory framework is put in place, as is the case in several European countries. This reform is urgent to secure contributors and encourage project leaders, believes Alaoui, stressing the need to revise tax provisions, establish a standard model validated by local authorities and put in place guarantees against abuse and fraud. "Encouraging this formula will help to revive a market that is now showing signs of fatigue."