Property Taxes in Morocco: What Foreign Owners Need to Know

Overview of Moroccan Property Taxes

Foreign property owners in Morocco are subject to several taxes that apply at different stages of ownership: at the time of purchase, annually during ownership, on rental income, and on any capital gain at the time of sale. Understanding each of these taxes is important for financial planning and legal compliance.

The main taxes relevant to foreign property owners in Morocco are:

• Taxe d'habitation (residence tax) — annual
• Taxe de services communaux (municipal services tax) — annual
• Impôt sur le Revenu on rental income (IR) — annual
• Plus-value immobilière (capital gains tax) — on sale
• Droits d'enregistrement (transfer tax) — on purchase

Morocco's tax system is administered by the Direction Générale des Impôts (DGI). Tax rates and calculation methods applicable to the General Tax Code (Code Général des Impôts — CGI) are subject to periodic change through Finance Laws. The figures and rates cited in this guide reflect the framework as of early 2026 but should be verified for the applicable tax year.

Taxe d'Habitation (Residence Tax)

The taxe d'habitation is an annual tax levied on properties used as residences. It applies to properties occupied by the owner, available for the owner's use, or made available to a third party for free.

Key features:

• The tax base is the rental value of the property (valeur locative), set by the tax authorities
• The rate varies depending on the property's rental value (a graduated scale applies)
• Properties used exclusively for commercial or professional purposes are exempt
• New properties are exempt for a period of five years from the date of completion
• A principal residence exemption may apply for properties used as the owner's main home (subject to conditions)

The taxe d'habitation is collected by local tax authorities. Bills are typically sent to the registered address of the property.

Taxe de Services Communaux

The taxe de services communaux (TSC) is a municipal tax that funds local public services (street lighting, refuse collection, etc.). It applies to all properties within a municipality's perimeter, whether or not the property is occupied.

Key features:

• The tax is levied on the rental value of the property
• The rate is typically 10.5 percent of the rental value for properties within urban areas and 6.5 percent for those in peri-urban zones (exact rates are subject to Finance Law updates)
• It is levied annually
• Both resident and non-resident owners are subject to TSC

Tax on Rental Income

Rental income derived from Moroccan property is subject to Moroccan income tax (Impôt sur le Revenu — IR), regardless of whether the owner is resident or non-resident in Morocco.

How rental income is taxed:

• Gross rental income is reduced by a flat-rate deduction for expenses (currently 40 percent of gross income for unfurnished residential property)
• The resulting net income is added to the owner's total taxable income and taxed at progressive rates under the IR schedule
• For non-residents, rental income from Morocco is taxable in Morocco. Double taxation treaty provisions may allow relief against taxes owed in the owner's country of residence

If the tenant is a Moroccan company or legal entity, the tenant is required to withhold 10 percent of the rent and pay it to the tax authorities on behalf of the non-resident owner. This withholding constitutes a payment on account against the owner's annual tax liability.

Non-resident individual owners who receive rent directly from private tenants are responsible for filing a Moroccan tax return (déclaration de revenus) and paying the IR on that income.

Capital Gains Tax (Plus-Value Immobilière)

When a property is sold, any capital gain (plus-value immobilière) — the difference between the sale price and the purchase price — is subject to income tax in Morocco.

How the gain is calculated:

• Purchase price: The original acquisition cost, plus allowable acquisition costs (notary fees, registration fees)
• Indexed purchase price: The purchase price is indexed for inflation using a coefficient published annually by the tax authorities
• Improvement costs: Capital improvements to the property (documented) may be deducted
• Net gain: Sale price minus indexed purchase price minus allowable costs

The net gain is included in the seller's taxable income for the year of sale and taxed at the applicable IR rate. The notary withholds the tax and pays it to the DGI at the time the deed is signed.

Principal residence exemption: A seller who has used the property as their principal residence for an uninterrupted period prior to sale may benefit from a full or partial exemption from capital gains tax. The qualifying period and conditions are specified in the CGI and are subject to change.

Transfer Tax on Purchase

When purchasing a property in Morocco, the buyer pays droits d'enregistrement (transfer tax). This is a one-time tax paid at the time of purchase:

• The standard rate is 4 percent of the declared purchase price for most urban residential and commercial properties
• Reduced rates may apply to first-time buyers of low-cost housing under certain conditions
• The tax is collected by the notary and paid to the DGI

In addition, a Conservation Foncière fee of 1 percent of the purchase price is paid to the land registry upon filing the transfer.

Tax Treaties and Non-Residents

Morocco has concluded double taxation treaties with a number of countries. These treaties govern which country has the right to tax certain types of income and may provide for reduced withholding tax rates or exemptions.

Key principles typically found in Morocco's tax treaties:

• Income from immovable property (real estate) is generally taxable in the country where the property is located — i.e., Morocco. Foreign owners cannot avoid Moroccan tax on Moroccan rental income or capital gains by citing their residence in another country.
• Where the same income is taxable in both Morocco and the owner's country of residence, the treaty's elimination of double taxation article (credit or exemption method) applies
• Morocco has treaties with France, Spain, Germany, Belgium, the United Kingdom, the United States, and many other countries

Non-resident property owners should consult a tax advisor familiar with both Moroccan and their home country's tax law to understand their full tax position.

Filing Obligations

Foreign property owners in Morocco have the following filing obligations:

• Annual income tax return (déclaration de revenus): Non-resident owners with rental income from Morocco must file an annual return with the DGI, declaring their Moroccan-source income. The filing deadline is typically 31 March of the year following the tax year.
• Taxe d'habitation and TSC: These local taxes are generally assessed by the tax authorities and billed to the property owner. The owner must pay the annual bill. Property owners should register their property with the local tax office to ensure they receive bills.
• Capital gains at sale: The notary handles the withholding and payment at the time of the deed of sale. The seller should review the notary's tax calculation before signing.

Failure to file required tax returns or pay taxes can result in penalties and interest. The DGI may assess the property against unpaid taxes, which can create complications at any future sale.

Frequently Asked Questions

What taxes do I pay on property I own in Morocco?

Foreign property owners may be subject to: taxe d'habitation (if the property is used as a residence), taxe de services communaux (annual, regardless of occupancy), income tax on rental income if the property is rented, and capital gains tax on any profit from sale. Transfer tax is paid once at the time of purchase.

Is rental income from Morocco taxable?

Yes. Rental income from Moroccan property is subject to Moroccan income tax whether the owner is resident or non-resident. The net taxable income (after a 40 percent flat deduction) is taxed at progressive rates. Double taxation treaty provisions may allow relief in the owner's country of residence.

What is capital gains tax on property sales in Morocco?

Capital gains (plus-value immobilière) from the sale of Moroccan property are subject to income tax. The gain is the sale price minus the indexed purchase price and allowable costs. The notary withholds the tax at the time of sale. A principal residence exemption may apply.

Do I owe property tax even if I don't live in my Moroccan property?

The taxe de services communaux applies annually regardless of occupancy. The taxe d'habitation applies to properties used as a residence; an unoccupied property may be exempt from this tax but remains subject to TSC.