A Guide To Buying Property in Morocco
What do I need to know when buying a property in Morocco?
As a foreign national in Morocco, you can become the sole 100 % owner of your property. This is made easier by the fact that you do not need to be a resident to open a bank account in Morocco.
It should also be noted that approximately 10 % of the final sale price will be added to the final sale price. This sum breaks down into 3 % (excluding VAT) for agency fees, and around 6 to 7 % for notary fees, registration fees and other taxes.
If you are looking to sell your property, or plan to do so in the future, please also note that capital gains tax will be 20 % (if the property in question is a secondary residence or if the former owner has been a principal resident in Morocco for more than 6 years), and 30 % for companies.
What happens during the sale of a property?
If the buyer decides that they would like to move forward in acquiring a property, they will provide a written offer for the property in question. If the seller accepts the offer, then a summary of terms and conditions following a negotiation will be provided to both the seller and buyer.
To buy a property in Morocco, the buyer must choose a notary. The agency is available to provide help and advice so that the buyer can choose a notary best suited to their needs.
The notary will request all documents from the seller or their representative. The notary will prepare all the documents, including a draft document for final signature, a sales compromise, and a calculation of registration and notary fees.
The buyer will then have several options by which they can choose to settle the transaction:
- The buyer can come in person to open an account in Moroccan dirham in the bank of their choice. This would mean the buyer would have to transfer all the funds to their new account, thus adding 10% to the selling price. The bank can then provide them with a legitimate certificate ensuring the receipt of the money and safely transfer it to the notary. However, this could result in additional fees when issuing the bank check.
- Another option for the buyer is to send the funds directly to the notary. The notary will then recover this money from his professional account to the Caisse de Depot (CDG) or a professional bank account approved by the CDG. This method guarantees the buyer that their money is secure until the title to the property in their name is obtained.
In both circumstances, two transactions happen; one for the property transaction and another for the notarial and registration fees.
After signature, it will take around 10 to 15 days to register the property in the new buyer's name.
How do I set up a mortgage in Morocco?
To set up a mortgage, there is some self-financing required. This is a minimum of 30% of the value of the property in question.
It is worth noting that the interest rate in Morocco is between 5% and 7% and that the maximum length of the loan is 180 months or 15 years.
To touch on debt capacity, the payment period for a mortgage differs depending on the status and financial status of the applicant. The debt ratio will be a maximum of 35% if the buyer's monthly income is less than or equal to 20K MAD. The debt ratio will be a maximum of 40% if the buyer’s monthly income is less than or equal to 40K dihram, and the debt ratio will be a maximum of 45% if the monthly income of the buyer is more than 40K MAD, respectively.
- Maximum of 35% if the buyer's monthly income is less than or equal to 20,000 MAD ;
- Maximum of 40% if the buyer's monthly income is less than or equal to 40,000 MAD;
- Maximum of 45% if the buyer's monthly income is over 40,000 MAD.
What documents do I need for a mortgage request?
To request a mortgage in Morocco, there are several documents that you must have to hand. Firstly, you need identification documents, including a photocopy of your passport and proof of current address (an electricity or telephone bill will suffice).
In terms of financial documents, you will need a personal tax return and tax notice for the years 2022 and 2021, as payslips from the last 12 months.
If the buyer has any other personal rental income or dividends, this must be justified. In case of any private charge credits being reimbursed, an amortisation plan can be attached. The buyer will also need bank statements of personal accounts for the last 12 years.