Once you have the keys to your riad in hand, your tax obligations do not end with the sale. Every year, property owners in Morocco are liable for two local taxes: the council tax and the municipal services tax. The amounts involved are generally modest compared to the price of the property, but the way they are calculated often surprises our French clients, as it depends on how you use the property: as a main residence, a second home or a rental property.<\/p>\n
This guide is based on Law No. 47-06 on local authority taxation, as amended by Law No. 07-20. It supplements our Guide to property taxation in Morocco<\/a>, which sets out all the taxes relating to a property, from purchase to resale.<\/p>\n In short<\/strong> : The housing tax applies to the property you occupy yourself (or make available free of charge to your immediate family), with a scale ranging from 0 to 30 % of the rental value and an allowance of 75 % for your main residence. The municipal services tax is added at a rate of 10.50 % in urban areas such as the medina of Marrakech. If the property is let, the municipal services tax, based on the rent, takes precedence.<\/p>\n Under Article 19 of Law No. 47-06, the housing tax is levied annually on buildings occupied, in whole or in part, by their owners as\u2019main or second home<\/strong>, or made available free of charge to their spouse, ascendants or descendants. It includes the land and the immediate outbuildings (courtyard, garden, passageways).<\/p>\n It is drawn up in the name of the owner or the usufructuary. In the case of joint ownership, it is drawn up in the name of the joint owners, unless the joint owners request that it be drawn up separately for each residential unit used independently.<\/p>\n The tax applies within urban boundaries, in designated town centres, in summer, winter and spa resorts, as well as in areas covered by a development plan. A Marrakech riad in the medina, just like a villa in Gu\u00e9liz or L\u2019Hivernage, therefore falls within its scope.<\/p>\n The tax is calculated on the basis of the rentable value<\/strong> the rent, determined by a valuation committee by comparison with the average rents charged for similar properties in the same neighbourhood. It is revised every five years by an increase of 2 %. It is therefore neither the purchase price nor the market value that serves as the basis, but a theoretical annual rent.<\/p>\n An allowance of 75 %<\/strong> applies to the rental value of the owner\u2019s or usufructuary\u2019s main residence. It also extends to a property occupied as a main residence by a spouse, first-degree ascendants or descendants, and to a property that Moroccans living abroad retain in Morocco where it is occupied free of charge by these relatives. It cannot be combined with any other reduction.<\/p>\n The key point for a foreign buyer: if your riad is a holiday home<\/strong>, he is indeed liable for council tax, but without<\/strong> the 75 % allowance, which is reserved for the main residence.<\/p>\n Article 27 sets out the rates by bands of annual rental value:<\/p>\n The tax is assessed via the tax roll: you will receive a tax notice. No tax notice is issued if the amount due is less than 200 DH.<\/p>\n The municipal services tax (TSC) is payable annually by the owner or beneficial owner of any type of built property. The tax base depends on the location of the property (Article 35):<\/p>\n This is your main residence: you pay council tax based on the rental value after a deduction of 75 %, and the TSC based on the rental value. This is the most favourable situation, and the one faced by many pensioners living in Marrakech. Our article on the retirement in Morocco<\/a> sets out the other aspects of an installation.<\/p>\n It is a second home: council tax is payable in full, with no allowance, and the TSC is calculated on the basis of the rental value. The amount depends on the rental value set by the valuation committee for your neighbourhood.<\/p>\n In principle, a let property is not occupied by its owner and is therefore exempt from the housing tax. However, the TSC remains payable and, for a property not subject to the housing tax, it is calculated on the total amount of rent. Example: a riad situated in the medina, let to a tenant for 180,000 DH in gross rent over the year, would be subject to a TSC of 180,000 \u00d7 10.50 %, i.e. 18,900 DH. If the riad is operated as a guesthouse subject to business tax, the TSC is then based on the rental value used for that tax.<\/p>\nThe council tax: who is affected?<\/h2>\n
Taxable assets<\/h3>\n
Territorial scope<\/h3>\n
The main exemptions<\/h3>\n
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How is the council tax calculated?<\/h2>\n
The rental value, the basis for the tax<\/h3>\n
The 75 % allowance for the main residence<\/h3>\n
The scale<\/h3>\n
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The local services charge<\/h2>\n
Who pays for it, and on what basis?<\/h3>\n
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The rates<\/h3>\n
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Main residence, second home or rental property: three real-life examples<\/h2>\n
You live in your riad all year round<\/h3>\n
You look after them for a few weeks a year<\/h3>\n
You\u2019re renting it<\/h3>\n