Real estate Inheritance taxation of MRE and foreigners 2023


Real estate in Morocco: Inheritance taxation of MRE and foreigners

Real estate in Morocco: Inheritance taxation of MRE and foreigners

  • There are certain taxes to be paid when inheriting or in the event of a gift in Morocco.
  • Rights holders could pay taxes in their country of tax residence, even if the goods are located in Morocco.

First of all, it is necessary to define what succession is. In this case, we speak of succession when the patrimony of a deceased person is transmitted to his heirs, that is to say, his heirs, or else to his legatees if the deceased had made a valid will in their favor. Remember that in Morocco, the applicable inheritance law is Muslim law for Moroccans and foreigners of the Muslim faith, Hebrew law for Moroccans of the Jewish faith, and "its national law" for a foreigner who is not Muslim, in other words, who comes under his country of origin. It is, therefore, necessary to find out, for the latter, about the applicable law.

Inheritance taxation in Morocco

In principle, and according to the law, the beneficiaries of inheritance in Morocco are not subject to taxation under Moroccan taxation, but there are however certain taxes to be taken into consideration. In this respect, according to the law in force, only registration fees of 1.5% are payable in the event of an estate division between the beneficiaries or 1% in the event of the inventory of the estate mass being drawn up (calculation of the estate of the deceased). As for the act noting the rights of the heirs, it is recorded at the fixed duty of 200 DH. When the inheritance relates to real estate, the registration of the heir gives rise to the payment of a fee per property of 100 DH for the benefit of land conservation and 500 DH.

In the case of a real estate donation in the direct line, between spouses, between brothers and sisters, the registration fees are 1.5% and those of the land conservation are 1.5% of the value of the donated property.

If this donation is not made for the benefit of the persons mentioned above, the registration fees are, if they relate to a built-up building 4% and on bare land 5%. The rights of land conservation remain for their part, according to the law, of 1.5%.

Furthermore, it is important to note that States tax inheritances relating to property located on their soil, regardless of the nationalities or domiciles of the deceased or the heirs. But also when the deceased is a tax resident, in other words, he resides in another country where the assets concerned by the taxation are located, and in which he could also be taxed. In this respect, the case of France is instructive since the heirs to the Moroccan heritage of a tax resident in Morocco are subject to inheritance tax, once they have resided in France for 6 of the last 10 years which have preceded death. 

  • We recommend that you familiarize yourself with the tax obligations in force in your country of residence in the event that you hold dual nationality or are foreigners, as well as the content of the international conventions concluded by Morocco aimed at eliminating double taxation. 

 Validated the devolution of inheritance

The attribution of the right to the succession is carried out when an act of heredity noting the death and the rights of those who inherit from him is received and registered. It allows heirs and potential beneficiaries to justify their rights. If the succession relates to real estate registered with the land registry, it will be necessary to request the land registrar, on the basis of the deed of inheritance, to register the inheritance rights on the land title after having noted the death of the former owner and validated the devolution of inheritance. A certificate of ownership issued by the land registry attests to the recognition by this administration of the new situation of the property and the new owners.

Real estate acquisition: Advice for foreign buyers

  • We advise foreign buyers to be accompanied by professionals during the operation of prospecting or acquisitions of real estate.
  •  We advise them to favor the purchase of securities.

First of all, we must invite potential buyers to favor the purchase of titled properties and encourage the owners of untitled properties to register their real estate with the land registry to enable them to benefit from modern land law. The owner can even, as a precaution, keep the duplicate of the land title, that is to say, its exact copy, in order to block any operation, since none will be possible on the land title if it is not in the same time mentioned on the duplicate. We also advise future buyers to pay attention to the certificate of ownership, in order to check that there is no mortgage on the property to be acquired or specific charges. Similarly, in the case of prospecting or purchasing land with the aim of building a property there,

Request a certificate of ownership

We encourage future buyers to also monitor their property rights by requesting a certificate of ownership each year to ensure that their names are still on the land title, as this helps to avoid any unpleasant surprises. It should be noted that the code of fundamental rights, by imposing the authentic and in particular notarized form for deeds likely to be registered on a land title, has taken an important step in the way of securing since the drafter of the act, if it is a notary, by taking responsibility for the content of the act and completing the formalities with the land registry, promotes the efficiency of the system.

Recovery of the real estate sector

The recovery of the sector is confirmed

  •  The reopening of Morocco's borders has given a "boost" to the real estate sector and has allowed the resumption of pending transactions.
  •  Morocco's social stability gives it a major advantage with foreign investors.

The recovery of national economic indicators is confirmed. Moreover, according to the latest figures from the High Commission for Planning (HCP), economic activity would have increased by 1.2% in the first quarter of 2022.

Thus, several sectors have recovered, led by tourism which, according to data published by the HCP, contributed +1.9 points to the evolution of GDP in the first quarter of the current year, in the wake of the improvement in the epidemiological situation linked to Covid-19 and especially following the reopening of air borders from February 7, 2022. The recovery in tourism also had, in turn, positive and clearly remarkable in other sectors of activity, in particular, that of real estate.

Improvement for the real estate sector in Morocco

Improvement for the real estate sector in Morocco

Indeed, you should know that when the country's borders were closed due to the appearance of new variants and the increase in cases of contamination, several real estate transactions in progress ended up being "aborted" or suspended. Based on our observations, the reopening of the borders has therefore enabled people with transactions on "stand-by" to continue them, or for others to prospect on offers or even to carry out a purchase operation directly after A favorite.

We also notice a return of foreign investors to purchases of "Riads", particularly in tourist cities such as Marrakech, and the return also of a very wealthy clientele whose purchase budget is between 3 and 5 million euros. This has undoubtedly encouraged the increase in the number of real estate transactions in Morocco. According to our outlook, this trend will continue in the coming months in a more accentuated manner. Precisely, after the end of the diplomatic "quarrel" between Morocco and Spain and the resumption of maritime links between the two countries, the next summer period will be marked by a massive return of MREs, and the Marhaba 2022 operation will This is a very promising announcement and, according to expectations, should register a record level despite the increase in the cost of transport.

 From this perspective, it should be noted that MREs are essential economic players and major generators of foreign exchange for the country. Apart from remittances, MREs are also known as investors in several business sectors. Among their favorite areas is real estate, for the entire range of products (economic, residential, seaside, business premises, etc.). As professionals in the real estate sector, we know that Marhaba 2022 will greatly boost the real estate sector in Morocco, especially in cities like Marrakech, Essaouira, and Tangier.

A stable and accessible country

Moreover, apart from the fact that Morocco is a country where it is good to live or spend holidays, it is only two hours by plane, on average, from Europe, and the cost of living there is much more accessible. In addition, Morocco is a country that remains politically stable, and which has been able to preserve its social peace despite the historic crisis linked to the Covid-19 pandemic, and this plays a key role for foreigners who wish to acquire property in Morocco. According to our own data, the question related to the social and political stability of Morocco comes up very often from investors who prospect for properties in Morocco. 

  • The political stability of the Kingdom, therefore, gives it a major advantage.

Dematerialization of services for the sector

The Covid-19 crisis has not only had adverse effects. Indeed, the dematerialization of services in Morocco has seen a marked improvement during the period of the pandemic, especially those relating to the real estate sector. The National Agency for Land Conservation, Cadastre and Cartography (ANCFCC), has made it possible since September 01, 2020, for notaries to electronically sign registration and registration files. One of the new features to streamline and facilitate the exchange of data between the Agency and notaries, and also allow better traceability of files. Also a few weeks ago, the National Council of the Moroccan Order of Notaries (CNONM) launched "Tadbirnot",

This new feature will allow notaries to electronically sign their deeds and documents exchanged, in particular with land registry services. In conclusion, we can say that the resumption of tourist activity in Morocco, the resilience of its social fabric in the face of the crisis, and the improvement of the business climate have constituted a basis for the revival and recovery of the real estate sector whose prospects look reassuring.

3 good reasons to sell or buy your property with EL HODEIBI SERVICE

3 good reasons to sell or buy your property with EL HODEIBI SERVICE

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