The Melkia is a document testifying ownership in the archaic Moroccan system that existed before the creation of the Land registration and official deeds system. Since the creation of the Land Registry it is possible to turn a Melkia into an official title deed. The Melkia continues today to co- exist along with the modern system, particularly in the medina and the countryside. An Adul who is a religious figure, draws up the Melkia ,he also is authorized to perform weddings and deal with divorces. The Melkia is a legal document, but it can be imprecise on the technical definition of the property, its size, limits and particularly the number of legal successors, It is possible to buy a Melkia but Marrakech Realty don’t advise it. It is wiser to ask the notary to apply for the title deed. The title deed is the safest guarantee of the ownership of the property
A title deed (titre de proprieté) is the only absolute guarantee that a property indeed belongs to a particular person Requisition is a stage in the process of transforming a melkia into a title deed . It is safer and more precise than the Melkia , but could be subject to contestation . It takes approx 5 weeks to obtain a requsisition number , following this it can take between 2 to 4 years to obtain a title deed. While the property is in requisition, in theory somebody could come forward and make a claim on it. However in practice there are practically never claims made on properties that have been measured and registered by the Land Registry . After an expert from the Land registry has established the boundaries of the property they make a public announcement : a four month period during which any person who has something to claim may do it. If after this period nobody made any claims, the definitive title deed will be issued .
It is the notion of tax residence that will determine whether Moroccan tax law applies to taxation: will be considered as tax residents in Morocco people having their habitual residence in Morocco.
The criteria that come into play are:
- the possession in Morocco of a permanent home
- the presence in the country of economic interests
- living in Morocco for a continuous or discontinuous period of more than 183 days a year.
The Income Tax Schedule (IR) is as follows:
(note: this new scale, valid since the 2007 Finance Act, replaces that of the IGR) – Marginal rate applicable on the tranche.
- Annual income from 0 to 24,000 DH: exemption from IR
- 24 001 to 30 000 Dh: 15% tax rate, with a deduction of Dh 3 600
- from 30 001 to 45 000 Dh: 25% tax rate, with a deduction of 6 600
- from Dh 45,001 to Dh 60,000: taxation at the rate of 35%, with a deduction of 11 100
- from Dh 60,001 to Dh 120,000: taxation at the rate of 40%, with a deduction of 14 100
- more than 120 000 Dh: taxation at the rate of 42%, with a deduction of 16 500
Retirees benefit from a very favorable measure of exemption: in addition to the 40% abatement on the pension paid, they benefit from an additional allowance of 80% (on the basis of amounts transferred definitively to an account in non convertible dirhams).
The transfer to Morocco of the pension must be requested from the paying agency (in France, the CNAV) which will make the transfer to the bank account or payment by mandate in Morocco.
Fees and taxes due by the purchaser: In Morocco, the costs incurred following the acquisition of real estate vary depending on the legal nature of the property: (these percentages apply to the value of the property acquired, including T.V.A.).
1. House for residential use, for a period of more than 3 years or Land not built with commitment to build within 7 years: Registration fees: 4% Notary tax: 1% Land conservation: 1.5% + 150 MAD (property certificate) Emoluments: 1%, with a minimum of 2500 MAD + 7% VAT Upgrading of buildings to land conservation if necessary: 0.5% + 75 MAD Miscellaneous costs (stamps … ): 1500 to 3 000 MAD according to the files. to note: The follow-up of the file by the office of the changes sometimes requires some additional expenses which can possibly be spread out in the time. In case of acquisition of untitled property (melkia), titration costs must be added; these fees depend on the floor area and the price of the property acquired. They can sometimes be shared with the seller.
- Publication fees: 450 DH
- Ad Valorem Rights: 1.5% up to 50,000 MAD + 2% of the value above
- Surface rights: MAD 45 per hectare started (urban area); per hectare started (rural area);
- Fixed fees: MAD 75
- Duplicate: MAD 75
- Surveyor: 2,500 MAD approximately
- Other expenses (stamps …): 1500 MAD approximately.
2. Premises for commercial use or undeveloped land with no commitment to build:
- Registration fees: 5%
- Notary tax: 0.5%
- Land conservation: 1%
- Emoluments: 1%, with a minimum of 2500 MAD + 7%.
- Miscellaneous expenses (stamps …): about MAD 2,000.
3. Agricultural land: A foreigner can not claim to buy agricultural land. So that he can buy this property it will be enough to modify the legal nature of the land by obtaining that it is declared non-agricultural vocation (procedure sometimes long). Some regulatory elements: URBAN TAX (UT): The main or secondary dwelling is subject to the urban tax. This tax depends on the rental value of the dwelling, determined by comparison or direct assessment by the census commission. Said rental value is reconsidered every year on the rise, an increase of 2%. However, if you are Moroccan living abroad, you benefit from a 75% discount (rental value) even if your accommodation is occupied by your children or your parents, or not occupied continuously by yourself. The urban tax does not apply to new premises and buildings for 5 years from the issue of the residence permit.
GENERAL INCOME TAX: Income and Property Profits
1. Land Profit:
If you sell a building or land, the profits you make will be subject to the General Income Tax in the income and property tax category at the rate of 20% with a minimum of 3% of the transfer price. Profit is determined by the difference between the selling price and the value of the current land and the justified investments. The present value is obtained by applying a coefficient established annually by ministerial order. However, you can benefit from a: Total exemption: -For the profit made on the transfer of a dwelling occupied as principal dwelling: for at least 5 years and 10 years at the most when the selling price does not exceed 1 million MAD; for at least 10 years regardless of the transfer price. -The profit made on the occasion of the first sale of social housing. The profit made by any person who proceeds in the calendar year of the sale of buildings whose total value does not exceed 60 000 MAD. Profit on gratuitous donations on ascendants and descendants, between spouses, between brothers and sisters. Exemption of 50%: -For profit corresponding to the portion of the transfer price exceeds 1 million MAD of housing occupied as a main dwelling for more than 5 years and less than 10 years.
Your return must be filed with the recipient of the registration within 60 days of the surrender date at the same time as the payment of the tax. This statement must be accompanied by the documents justifying the investment expenditure alleged to have been incurred.
Estate agency fees are 5% excl VAT (6% VAT incl). Theses are divided between the buyer and seller (2.5% excl VAT each party).
Agency fees on a long term rental (1 year minimum) are a month’s rental excl VAT for the tenant and a month’s rental excl VAT for the owner