A country full of sunshine and immersed in culture, Morocco draws in many people from all over the world. Most people who visit Morocco, immediately fall in love – so much so that some might even want to invest in a property there. In this blogpost, we’ll talk you through some of the things you need to know to buy a property in Morocco.
Foreigners are allowed to purchase real estate in Morocco, and the restrictions on foreign buyers are minimal. However, they cannot buy agricultural land. To add to this, there are favourable tax concessions like: no inheritance tax, low capital-gains tax, and no property tax for the first 5 years of owning the property. The tourist visa allows foreigners to stay in the country for 90 days, and in order to stay longer it is necessary to apply for a residency visa.
The house buying procedure
There are a couple of things to keep in mind when purchasing a property in Morocco. First, even after the buyer has made a verbal offer, agreement, and submitted a deposit, the seller can still accept a better offer should they receive one. Following from this, even though it is normal to pay deposit once there is an agreement on the purchase price, this does not guarantee that the house will be put off the market by the seller. And so, it is a better idea to pay a smaller deposit, think of it as more of a reservation fee. Sometimes, the homes might still be occupied by the current tenants and the buyer will have to wait for the occupant to move out.
Next, in Fez (medina), the homes don’t have titles. Instead, scrolls are written by an official scribe for documenting the ownership of them. Through a notary, the title for a house can be acquired once it has been purchased.
Besides what was mentioned above, the buying process is fairly similar to the one in France and Spain. A notary acts for both parties, signatures on the sales deed of the contracting parties need to be notarised and the sales deed should be registered. Then, the buyer applies for the listing of the registered deed to the land registry.
A registration duty of 6% is pertinent when buying a building from legal entities or individuals. This also applies when buying an undeveloped land for building houses. The sales deed is listed in the land registry (which is 1%), similar to the registered deed. Usually, 0.5% to 1% of the property value will be the cost of the notary. And 1% of the property value goes towards stamp duty. One can always negotiate legal fees, but the range is usually from 1% to 5% of the property value. The real estate agent usually charges a 2.5% of the purchase price for the commission.
Issues an expat might encounter when buying a house in Morocco
Foreigners might face some challenges when purchasing a property, including scams and difficulties because of a language barrier. Here’s some things to keep in mind:
- Identity theft: make sure that the seller is who they say they are, ask to see some form of identification
- Confirm that the seller has the right to sell ask to see the deed of the property, or something similar
- Confirm and double check the property details: for example, is the total square meterage correct?
- Financial checks: make sure there is no outstanding credit still on the property you are purchasing
- Declare: make sure to declare the full purchase amount on the contract sale.
