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The government incentives for buyers in the UK include:
0% tax on rental income during the first 5 years
0% of taxes on capital gains if the profit is below 40K pounds or after 10 years of ownership
0% tax on estates when a property becomes another family member
100% repatriation of funds from the sale
The following is a very basic guide about the tax implications for investors in the UK.
STRATEGY TO BUY AND SAVE / RENT
PERSONAL INCOME TAX REVENUES BY RENTALS (IGR)
Investors from the United Kingdom using a strategy of buying for rent will have to pay taxes on this income. In Tangiers 66% of this income pay a tax of 22% (other parts of Morocco pay 44%). The city of Tangier is a 50% reduction on the rental income, thereby adding another advantage for investment in Tangier.
There is also a three-year exemption for the first three years in which owns the property.
PROPERTY TAXES (Taxe Urbaine) (Option holiday house staff)
The property taxes are paid annually. The first five years the owners are fully exempted. (Agencies property are not included). After 5 years, the tax is basa on the value of annual income for housing.
CORPORATE TAX
If you intend to buy a number of properties Moroccans, you might want to consider establishing a Limited Company Moroccan - the time it takes to mount a Moroccan Society Limited (SARL) is usually three weeks.
TREATY OF UNITED KINGDOM - MOROCCO
There is a double tax treaty between the United Kingdom and Morocco ensuring that investors do not pay IBI in both countries.
TAX HERENCIAS
This tax is 0% for family members. Always obtain professional advice before implementing any strategy with regard to inheritance tax.
The most important advice you can give on this subject is: Make a testamento Marroquí!
EXEMPTION OF IBI
When the property is sold after the owner for more than ten years.
When it has owned for more than 5 years but less than ten years. In this case the tax CFI (IBI) will be 10% of any capital profit that exceeded 1 million dirhams.
STRATEGY TO BUY SELL
REAL ESTATE TAX BENEFIT (Taxe sur les Profits Immobiliers - CFI)
The tax benefits of real estate is 20% of the benefit with a minimum of 3% of the selling price of housing. The CFI (IBI) se basa en el selling price minus the purchase price.
The purchase price includes the following:
• Expenses credits
• Costs for registration
• Minutes notary and taxes
• Repairs
• Minutes of Managers
• Inflation (based on a table of government)
The second option for calculating the purchase price is to add a 15% to the sale price. This option is used when there are no invoices to justify the expenses.
TAX COLLECTION OF RUBBISH (Fiscalite des collectivites local)
There is a 5-year exemption from tax of garbage, which is set at 10% of the annual value of rental housing.
TAX ON THE RENTAL HOUSING (Taxe Urbaine) (option investor)
Investors pay 13.50% on the value of rental housing.
1- Urban tax
Imposed for each principal or secondary habitation.
The urban tax depends on the rental value of habitation.
The rental value of housing is revised every 5 years by a rise of 2%.
Applicable rates :
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Rental value
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Rate
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From 0 to 3000
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0%
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From 3001 to 6000
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10%
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From 6001 to 12000
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16%
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From 12001 to 24000
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20%
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From 24001 to 36000
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24%
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From 36001 to 60000
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28%
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+ de 60000
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30%
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Advantages of the urban tax
Not applicable to the new buildings
Not applicable to the construction's complements in the first 5 years following the obtaining the residence licence
The Moroccan residents leaving abroad (MRE) take benefit of a 75% abatement of the rental value.
2- Tax with municipal administration
Applicable tax on the buildings intended to be for a principal or a secondary residence.
Advantage for MRE: if it is about the principal residence, you will benefit from 75% abatement.
Applicable rates :
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Rented property location
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% Rental value
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In an urban district
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10%
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Peripheral zone in urban communes
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60%
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3- Rental incomes
It's obligatory to declare your properties to the General Tax on the Income (IGR) in two cases:
Purchasing an already rented property
Deciding to rent your residence
IGR Scale:
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Annual income
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Rate
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From 1 to 20.000 MAD
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IGR exemption
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From 20.001 to 24.000 MAD
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13% with an abatement of 2600 MAD
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From 24.001 to 36.000 MAD
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21%, with abatement of 4520 MAD
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From 36001 to 60 000 MAD
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35% with an abatement of 9560 MAD
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From 60.001 and more
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44% with an abatement of 14 960 MAD
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4- Income taxes
The income is the difference between:
- The selling price decreased from the selling charges and
- The acquisition price, increased by the acquisition charges, investment dispenses and unpaid interests
The rate is 20%.
The due amount of tax will not be lower than 3% of the selling price.
Conditions for the total exemption from this tax:
A profit accomplished during the selling of an occupied accommodation as principal habitation for a period more or equal 8 years
A profit accomplished during the first housing sale for a social reason
A profit accomplished by any person who realize, in the calendar year, some buildings sales for which the total value does not exceed 60 000 Dh.
Profits on the sales, on a free basis on ascendants and descendants :
- To the spouse or the direct successors who continue to live in the building or the part of building after the owner’s death.
- To the owner to whom the right of ownership on her/his principal residence consists of personal actions or shared in a transparent real estate company.
Exemption for Moroccan residents leaving abroad for their principal habitation in Morocco.
5- Rights for inhabitation use properties and the inbuilt lands with commitment to build
Houses and apartments for habitation use for a period more than 3 years, as well as the inbuilt lands with commitment to build within 7 year are concerned with these percentages that are necessary to apply to the acquired properties, VAT included:
Registration Fees: 2.5%
Land conservation: 1% + 150 DH for the property certificate.
Notary tax: 0.5%.
Notary fees: 1%, minimum of perception: 2500 DH + VAT: 7%.
In case of a land purchase: 0.5% of the estimate of the value of the predicted constructions + 75 DH.
Diverse charges (Stamps,…): Between 1500 DH and 3000 DH according to the file.
Expenses to be added in case of a not titrated property:
- Publication rights + fixed rights + duplicate: 600 DH
- Surface area right: 45 DH per unit area started in urban zone, 45 DH per unit area started in rural zone
- Topographer charges: approximately 3000 DH.
- Other charges (stamps,…): approximately 1500 DH
6- Rights for commercial use sites and the inbuilt lands without commitment to buil
Registration fees: 2.5%
Notary tax: 0.5%
Land conservation: 1%
Notary fees: 1%, minimum perception: 2500 DH + VAT: 7%
Divers fees (stamps,…): Approximately 2000 DH
P.S: the foreigners do not have the right to acquire agricultural land. |
