In Morocco, real estate property is subject to various taxes that owners and sellers should be aware of in order to comply with tax obligations and avoid penalties.The following are the main taxes levied on real estate in the country.

1. Income Tax (IR)

Income Tax in Morocco is progressive, with rates varying from 0% to 38%, depending on the taxpayer’s annual income.This tax affects income generated from real estate rentals.Owners who earn rental income must declare this income and are subject to the corresponding tax rates according to the established progressive scale.

2. Value Added Tax (VAT)

VAT in Morocco has a standard rate of 20%, applicable to most goods and services; however, there are reduced rates of 14% and 7% for certain specific products and services; in the real estate sector, the application of VAT may vary depending on the type of transaction and the nature of the real estate.

3. Real Estate Tax (TPI)

Real Estate Tax, also known as TPI, is levied on the ownership of real estate in Morocco.The tax rate varies according to the location and value of the property.This tax is annual and is paid directly to the relevant municipality, contributing to the financing of local services and public works.

4. Tax on Real Estate Profits (TPI)

The Real Estate Profits Tax is levied on gains obtained from the sale of real estate properties.

The general rate is 20% on the net gain, which is calculated as the difference between the sale price and the acquisition price, adjusted for certain documented expenses and improvements.It is important to note that, according to the Finance Law of 2023, gains derived from the sale of a property that has been occupied as a principal residence for at least five years are exempt from this tax, provided that the sale price does not exceed Dh4,000,000.

5. Housing Tax and Communal Services Tax

Homeowners in Morocco are subject to the Housing Tax, which applies to properties used as a principal residence.In addition, the Communal Services Tax applies to all properties, regardless of their use, and is calculated on the annual rental value of the property.For principal residences, you can benefit from a 75% reduction on the rental value before the rate is applied.