There are a number of costs involved in buying property in Morocco, including the property taxes and legal fees. You will also need to consider the impact that currency exchange rates will have on the overall cost of buying in Morocco.
We generally recommend budgeting for something in the region of 6% and 7% of the value of the property. This should cover all legal fees, Notary fees, taxes and so on. If you are taking out a mortgage the cost will be slightly higher as there are normally bank costs in addition (between 1% and 1,5%).
The following is a breakdown of some of the main costs involved in buying property in Morocco, so you can have a better idea of what to expect when purchasing a Moroccan property.
Reservation contracts and deposits
You may be asked to sign a reservation contract and pay a deposit (which the amount depends on the developer commercial policy) to take the property off the market for a couple of weeks. This doesn’t commit you to buy but it is still worth having your solicitor to check that the contract is OK before signing. Just because a contract says “Reservation Contract” on it doesn’t mean that it is one.
After that you would work towards a full purchase contract and pay typically around 10% deposit (the amount depends on the developer commercial policy). That contract commits you to buy the property.
On a new property you may have to make stage payments throughout the course of construction.
The balance is paid upon signature of the title deeds and registration.
Moroccan property taxes
VAT
VAT is payable by the purchaser where the vendor is considered a developer who pays VAT and / or this is the first time that the property has been sold / transferred.
The VAT rate is fixed at 20%.
Taxe sur les profits fanciers (real estate taxation)
This is a tax based on the increase in the value of the real estate since the last transfer. The rate varies according to where the property is.
Its rate is fixed at 20% on the basis of the transaction added-value with a minimum of taxation fixed at 3% of the real estate transaction amount.
How exchange rates affect the cost of buying property in Morocco
In Morocco, payment for a property must be paid in Moroccan Dirhams (MAD). The real estate investment must be, once the transaction is made, declared to the Moroccan exchange office in order to ensure the retransfer payment if the investor decides to sell the real estate.
When you are converting from one currency to another the difference between one exchange rate and another can literally make a difference of thousands of pounds on your purchase.
Do not underestimate the difference that a good exchange rate can make. We know people who have sold properties and have made more money on the exchange rate difference than they have on the sale of their property.
Need help buying property in Morocco?
Our UK-based team of property lawyers are highly experienced in helping clients to buy and sell property in Morocco, as well as handling a whole range of related issues, such as advice on Wills and inheritance.
With a thorough understanding of both UK and Moroccan law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with property in Morocco.
Call: 01438 840 258 Email: admin@judicaregroup.com