Capital Gains Tax on Property in Morocco: 2026 Guide
Selling a riad as a Marrakech property is often the culmination of a wonderful journey. It is also a tax matter that requires preparation. In Morocco, capital gains on property are taxed as part of income tax, under the category of «property profits». Many owners still refer to «TPI», the tax on property profits that preceded it.
In this guide, we set out the rules as they appear in the General Tax Code (CGI) 2026: the rate, the minimum tax, the method of calculation, exemptions and the filing schedule. We have also included our practical observations from the sales we have supported.
In short : net capital gains are taxed at 20 % (Article 73 of the General Tax Code), with a minimum contribution of 3 % of the sale price, which is payable even in the absence of a profit (section 144). The main residence occupied for at least 5 years may be exempt, subject to certain conditions. The declaration and payment are made within the 30 days following the sale.
TPI in Morocco: what are we talking about?
Capital gains tax applies, in particular, to gains realised on the sale of a property situated in Morocco or of rights in rem relating to immovable property. It applies to individuals, whether resident or non-resident, regardless of their nationality. Companies, on the other hand, are subject to corporation tax.
For a foreign buyer, this is something to bear in mind right from the start of the purchase: the way in which you document your purchase and any renovation work carried out now will determine the tax you’ll pay when you sell the property. For an overview of the tax implications for property owners, see our Guide to property taxation in Morocco.
The rate of capital gains on property in Morocco
20 % of net profit
Net property profit is subject to a rate of 20 % (Article 73-II-F-6 of the General Tax Code).
A minimum contribution of 3 % of the price
Article 144-II of the General Tax Code imposes a minimum tax liability which may not be less than 3 % of the sale price, even if there is no profit. In practical terms, you pay the higher of the two amounts:
- 20 % of net profit; ;
- 3 % of the sale price.
This is the point that surprises our clients the most: a riad sold at its purchase price, or even at a loss, is still subject to this minimum, unless an exemption applies.
How to calculate taxable capital gains
Section 65 of the General Tax Code sets out the method. Net profit is the difference between:
- the sale price, less the costs of the sale (advertising, estate agent’s fees, legal fees payable by the seller, compensation for eviction, duly substantiated); ;
- the purchase price, plus acquisition costs, capital expenditure and certain interest on borrowings, and then adjusted by a coefficient.
Acquisition costs: a flat-rate fee of 15 % or actual costs
Acquisition costs (registration fees, land registry fees, legal fees, estate agent’s commission) are estimated on a flat-rate basis at 15 % of the purchase price, unless you can provide evidence of a higher amount. For the record, the details of these purchase costs are explained in our guide to Costs associated with buying property in Morocco.
Capital expenditure: your building works count
The CGI applies to expenditure on construction, reconstruction, extension, renovation and improvement, duly substantiated. For a renovated riad, this is often the decisive factor. Keep hold of invoices, building contracts and planning permission documents: without supporting documents, you won’t be able to claim the deduction.
The revaluation coefficient
The purchase price, adjusted as described above, is multiplied by a coefficient corresponding to the year of purchase. These coefficients are set by the tax authorities: ask your solicitor or the DGI which one applies to the year of your purchase.
Illustrative example
Let’s take a riad purchased for 3,000,000 DH, with 900,000 DH in documented renovation costs, and resold for 5,000,000 DH with 100,000 DH in documented disposal costs. To keep things simple, the calculation below does not apply the revaluation coefficient: this increases the acquisition cost and therefore can only reduce the profit.
- Net sale price — Calculation: 5,000,000 − 100,000; Amount: 4,900,000 DH
- Purchase price + flat-rate fees 15 % — Calculation: 3,000,000 + 450,000; Amount: 3,450,000 DH
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- capital expenditure — Calculation: + 900,000; Amount: 4,350,000 DH
- Net profit (before revaluation) — Calculation: 4,900,000 − 4,350,000; Amount: 550,000 DH
- IR at 20 % (maximum) — Calculation: 550,000 × 20 %; Amount: 110,000 DH
- Minimum contribution 3 % — Calculation: 5,000,000 × 3 %; Amount: 150,000 DH
- Tax due — Calculation: the highest; Amount: 150,000 DH
This case illustrates the importance of the minimum of 3 %: when the capital gain is small, this is the figure that applies.
Capital gains tax exemptions in Morocco
Section 63 of the General Tax Code provides for several exemptions. The three main exemptions for a riad owner are as follows.
The main residence, which has been occupied for at least 5 years
Any profit realised on the sale of a property intended as the owner’s principal residence is exempt for at least five years on the date of the sale. The property must not have been let or used for business purposes. This applies to:
- the person’s only home; ;
- the property chosen as her main residence, if she owns more than one; ;
- for Moroccans living abroad, a property retained as a residence in Morocco (or occupied free of charge by a spouse, ascendants or descendants in the first degree).
The exemption may only be claimed once during this five-year period, and a maximum of one year following the vacating of the property is allowed for the sale. The land is exempt up to a limit of five times the covered area.
Please note the threshold of 4,000,000 DH : where the sale price exceeds this amount, a minimum tax of 3 % remains payable on the portion of the price exceeding 4,000,000 DH (Article 144-II-2°).
Small sales
A profit realised by a person whose disposals of immovable property during the calendar year do not exceed 140,000 DH in total.
Gifts of family assets
Gifts between ascendants and descendants, between spouses, and between brothers and sisters are exempt from capital gains tax (Article 63-III).
What is not exempt
A riad operated as a guesthouse or let on a short-term basis is not eligible for the «principal residence» exemption, as the General Tax Code excludes properties that are let or used for business purposes. Nor is a second home.
Filing and payment: the timetable
Article 83 of the General Tax Code requires the filing of a statement with the tax authorities within 30 days following the sale, together with the payment of tax. It must be accompanied by supporting documents for the purchase costs and capital expenditure. In practice, the solicitor usually prepares this declaration and deducts the necessary funds from the sale price.
To see how this stage fits into the overall sales process, see our A guide to the stages of selling property in Morocco.
French sellers or non-residents: what you need to know
Tax is payable in Morocco
The Franco-Moroccan tax treaty of 29 May 1970 provides that gains arising from the disposal of immovable property are taxable in the State where such property is situated (Article 24). For a riad at Marrakech, Moroccan tax therefore applies.
And what about France?
French tax legislation (BOFiP) states that, in the case of immovable property, the right to tax capital gains lies with the State in which the property is situated. The manner in which capital gains must, where applicable, be declared in France or taken into account when calculating the tax rate should be confirmed with a tax adviser. Our article on the The France–Morocco tax treaty and property sets out these rules.
The repatriation of the sale price
If your purchase was financed in foreign currency and properly documented, foreign exchange regulations permit the transfer of the proceeds from the sale. For a property financed by a loan in dirhams, the Foreign Exchange Office authorises the transfer of the net proceeds up to the amount of the initial deposit in foreign currency, any repayments made in foreign currency and any capital gain. This is why it is important to keep all bank statements from the time of purchase.
Frequently Asked Questions
What will the capital gains tax rate on property be in Morocco in 2026?
How can I avoid the minimum contribution of 3 %?
It does not apply where the sale is exempt: a main residence for at least 5 years (with 3 % on the portion of the price exceeding 4,000,000 DH), annual disposals not exceeding 140,000 DH, and gifts between family members.
Does it take 5 or 6 years to qualify for the main residence exemption?
The CGI 2026 (Article 63-II-B) stipulates that the property must have been the owner’s main residence for at least five years on the date of sale, without having been let or used for business purposes.
Do renovation works on a riad reduce your tax bill?
Yes, provided they are duly justified: renovation and improvement costs are added to the purchase price before revaluation.
How long do you have to declare the capital gain?
Within 30 days of the sale, at the same time as the tax is paid. The solicitor usually takes care of this.
Does a French national pay capital gains tax in Morocco or in France?
Moroccan tax applies to property situated in Morocco (tax treaty, Article 24). The tax treatment in France should be checked with a tax adviser.
Prepare for your property sale with Klair & Arno
Are you thinking of selling your riad, or do you want to plan ahead right from the moment of purchase? We can help you gather the necessary supporting documents, value your property at market price and prepare for the sale with a solicitor. Contact us or find out more about our support services to sell a riad with 1 bedroom and 1 bathroom.
