Capital gains on Real estate property 



When a building or plot of land changes hands, the profits realised are subject to Moroccan Income tax “L’impot general sur le revenue” under the rubric of capital gains on real estate Property and taxed at 20% with a minimum of 3% of the selling price to be paid. The profit realised is calculated by taking the difference between the selling price and the current value of the land of the proven investments made. The current value mentioned above is calculated by using a coefficient set yearly by a ministerial decision.



The tax is possible in the following cases:



Total exoneration



On profits realised on the sale of a dwelling occupied as the main abode for a least five years and at most ten years, always providing the selling price does not exceed mad 1 million; or for at least ten years whatever the selling may be. - on profits realised on the first sale of a unit of social housing - on profits accruing to any person selling real estate property with a value not in excess of Mad 60 000 in any tax year. - On profits on fee transfers of property to progenitors and descendants, between spouses and between brothers and sisters.



50% reduction



On the profit corresponding to the part of the selling price in excess of the first MAD 1 million when the property has been occupied as the main abode for more than 5 years and less than ten years. Your tax return must be submitted to the property registration tax collector I, the 60 days following the date of the completion of the sale, the tax being paid at the same time. The tax return must be accompanied by proof of all investments made in the property.



Rental income



If the dwelling you have acquired is destined to be used as rental property or if it has been put at the disposal free of charge to anyone other than your parents or your children, then you must pay income tax on rental income. The net rental income is obtained by calculating a reduction of 40% of the gross rental income received. However, there is no tax during the three years following the year of completion of new construction and newly built additions to property.



I.G.R Income Tax scale

 

=> 0 to 20 000 : 0%

=> 20 000 to 24 000 : 13%

=> 24 001 to 36 000 : 21%

=> 36 001 to 60 000 : 35%

=> Above 60 000 : 40%



Important :



An annual declaration of overall income received from all sources during the year must be submitted every year by march 31st at the latest in order to avoid any fines or late-filing penalties.