Rental Income Tax Morocco: Rates and Tax Return

Renting out your riad, whether on a year-round basis or to holidaymakers, also means becoming a Moroccan taxpayer. Many owners only realise this when they come to complete their first tax return, often under time pressure. However, tax on rental income in Morocco is based on clear rules: a flat-rate allowance of 40 % on gross rent, followed by the progressive income tax scale.

Here is what you need to know, based on Article 2026 of the General Tax Code (CGI): which types of income are affected, how they are taxed, when to declare them, and why the way you let out your property may result in a different tax regime. For the general framework (purchase, ownership, resale), see our Guide to property taxation in Morocco.

In short : Rent received from a property situated in Morocco is, in principle, classified as property income. After a deduction of 40 % from the gross amount, the net income is subject to the progressive income tax scale (0 % to 37 %), and must be declared by 1 March of the following year. However, a hotel or guesthouse business may be classified as business income and subject to VAT.

What types of income are covered?

Article 61 of the General Tax Code defines the following as property income:, where they do not fall within the category of employment income, income received from the letting of built and unbuilt properties and structures of any kind. A riad, a villa or a let flat therefore falls within this category.

The gross income taken into account is defined in Article 64: it is the total gross amount of rent, plus any expenses that would normally be borne by the landlord but which you have charged to the tenant (major repairs, for example), and minus any charges that you bear on the tenant’s behalf.

The starting point is therefore simple: add up the rent actually received over the calendar year. Keep your tenancy agreements, bank statements and platform statements, as these will serve as your supporting documents.

The tax rate on property income

Taxable net income is calculated by applying a 40% allowance % on gross property income (Article 64-II of the General Tax Code). This net income is then subject to progressive scale income tax (Article 73-I):

• up to 40,000 DH: exempt; ;
• 10 % from 40,001 to 60,000 DH, 20 % from 60,001 to 80,000 DH, 30 % from 80,001 to 100,000 DH; ;
• 34 % from 100,001 to 180,000 DH, and 37 % above that.

Example: You let your riad to a tenant on an annual basis and receive 96,000 DH in rent over the year, with no other taxable income in Morocco. After the 40 % allowance, the net income is 57,600 DH, resulting in tax of 17,600 × 10 % = 1,760 DH. With 150,000 DH in gross rent, the net income is 90,000 DH, i.e. 2,000 + 4,000 + 3,000 = 9,000 DH (before deductions for dependants).

Special case: where the tenant is a company or a self-employed person subject to the actual or simplified net profit scheme, they must make a withholding tax payment of 10 % (annual gross amount below 120,000 DH) or 15 % (120,000 DH and above) (Articles 73-II-B-5°, 73-II-C-4° and 160 bis). This deduction does not constitute final settlement: it is set off against the tax calculated according to the tax scale. The landlord may also opt, electronically, for a flat-rate withholding tax of 20 % on the gross amount (Articles 64-IV and 73-II-F-12°).

Standard tenancy or tourist accommodation: a regulatory framework that may change

This is the most important question for a riad owner, and one that needs to be decided right from the start with an adviser.

What the CGI says

Rental income is classified as property income only if it does not constitute business income. However, the General Tax Code also subjects it to VAT accommodation services (Article 89) as well as the letting of furnished or equipped premises, and applies a rate of 10 % to accommodation services (Article 99). Business income, on the other hand, is taxed according to different rules: actual or simplified net profit, or the single business contribution scheme, subject to turnover conditions.

What this means for you

• Renting to a tenant on an annual basis : this is the standard situation for property income: a 40 % allowance, followed by a progressive tax scale.
• Short-term rental : Depending on how you run the riad (services provided, frequency of operation, legal structure), the business may be classified as tourist accommodation, with the associated implications for income tax, VAT and local taxes.
• Registered guest house : this falls within a professional context. If you are considering this model, please also read our article on the Airbnb regulations in Morocco, which sets out the requirements of Law No. 80-14 on tourist accommodation.

We cannot rule on your case remotely, nor can any reputable article: the classification depends on the facts. Our advice is to consult a Moroccan chartered accountant before you first let out the property, not after the first tax audit.

Filing and payment: the timetable

1. Obtain a tax identification number If you don’t have one yet: you’ll be asked for it when you file your tax returns.
2. Collect and record your rent payments throughout the calendar year.
3. Submit your return by 1 March for the following year: Article 82 of the General Tax Code sets this deadline for the annual tax return of individuals with income other than business income. For property income, the return must specify, in particular, each tenant, the location and details of each let property, its local authority tax reference number, and the gross and net amounts of the income.
4. Pay your tax in accordance with the procedures set out by the tax authorities.

Don’t forget about local taxes: a let property is still subject to the municipal services tax, which may be calculated on the basis of the rent. This is in addition to income tax when calculating your return on investment.

And in France? The relationship with the tax treaty

If you are a French tax resident, Article 9 of the Franco-Moroccan tax treaty provides that Income from property is taxable only in the country where that property is situated. The rental income from your riad is therefore subject to tax in Morocco.

France does not tax them a second time, but it retains the right to take them into account when calculating the tax rate applicable to your other income (Article 25 of the convention). In practice, this income must be included on your French tax return. Our article on the France–Morocco tax treaty explains this mechanism and its implications.

The mistakes we see most often

• Not declaring anything «because the rent is paid in France» : the platform or bank account may be based abroad, but the property is in Morocco, and that is what matters under the convention.
• Confusing gross rent with profit : The 40 % allowance is a flat-rate deduction; your actual expenses do not reduce your taxable income, as they would in a profitability calculation.
• Underestimating progressivity : A well-rented riad will quickly reach the 30 % or 34 % brackets on the scale. Take this into account in your forecasts.
• Choosing a diet after the event : Whether it’s a standard rental, a guest house or a business premises, the decision should be made in advance, in consultation with a professional.
• Failing to provide supporting documents : contracts, statements, invoices for building work. These will also be useful when you come to sell the property.

Frequently Asked Questions

What is the tax rate on rental income in Morocco?

Property income is taxed at the progressive income tax rates (0 % to 37 %) after a deduction of 40 % from the gross amount (Articles 64-II and 73-I of the CGI 2026). The rates of 10 % and 15 % are merely non-final withholding taxes, applied by corporate or professional tenants; in such cases, there is an option for a final withholding tax rate of 20 % on the gross amount.

When do you need to declare your rental income in Morocco?

Before 1 March of the year following that in which the payment was received, in the annual return provided for in Article 82 of the General Tax Code.

Is income from an Airbnb let classified as property income?

Not necessarily. The CGI excludes property income that is classified as business income and subjects accommodation to VAT. Depending on how you run your business, your activity may fall under a different tax regime: have it assessed by a professional.

Does a non-resident have to declare their rental income in Morocco?

Yes. As the property is situated in Morocco, the rental income is taxable there, regardless of your country of residence. For a French resident, the tax treaty stipulates that this income is taxable in Morocco.

Do these rental payments also need to be declared in France?

France does not tax this income, but may take it into account when determining the tax rate applicable to your other income. It must therefore be included on your French tax return, in accordance with the procedures to be agreed with your adviser.

A rental property with 1 bedroom and 1 bathroom?

We support our clients from the choice of riad right through to putting it up for rent, and we work with chartered accountants who are experienced in dealing with overseas property owners. Contact Klair & Arno to look into your project.