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Morocco sits just 14 kilometers from the shores of Southern Spain and is very easily accessible. Its progressive government is making Morocco a truly viable place in which to own property.
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Morocco sits just 14 kilometers from the shores of Southern Spain and is very easily accessible. Its progressive government is making Morocco a truly viable place in which to own property.
For many, Spain’s comparatively high prices and overcrowded resorts are making exotic Morocco the ideal choice. Property in Morocco remains wonderfully cheap and ripe for investment, with property prices having trebled in the past 5 years.
The buying process is much the same as in Spain or France and obtaining expert advice over any possible pitfalls is relatively simple. There are already many French home owners present, a fact which continues reassure other European buyers.
Property purchase is straightforward and Morocco is well set up to receive overseas buyers.
The Process
Local agents, or ‘Simsaars’ assist in finding you a property. A good simsaar will know which properties already have clear ownership which avoids any legal wrangles. A simsaar will charge 2.5% of the purchase price at completion and many of them work solely for commission.
• Find a suitable property in the right location. You could seek an architect or structural engineer to take a careful look. An inspection and report normally costs 500 to 700 Dirhams (approx. € 60).
• Pay a deposit of approx. 10% of the purchase price. Note: the vendor can still sell to somebody else if they offer more money for the property. They are then obliged to return your deposit in full. However, if you pay a further 20-30% of the purchase price with the 10% deposit you will secure the property as yours.
• Wait 6 – 8 weeks while searches are done on the property.
• Sign the purchase contract at the Notary office, in person or appoint a power of attorney.
Finally, change the lock! It is likely that a number of people have the key. It’s also strongly recommended to have someone stay in the property at night if you are not there. You can hire a guardian for about 1,000 DH (€ 100) per month, but be certain this is someone you can trust.
The Notary
The Notary performs a similar role to those in France or Spain. They check there are no debts due on the property, that paperwork is in order and in Morocco, unlike France and Spain, the Notary actually creates and signs all the papers.
Notaries do not represent either the seller or the buyer so there is never any conflict of interest. Their fees are up to 1% of the total costs.
Mortgages
Mortgages are available in Morocco, but the most an overseas buyer can get is 50% of the valuation price. The purchase can be paid in either Euros, US Dollars or Sterling, and needs to be transferred from a foreign account into a Moroccan bank, where the transaction is processed into Dirhams.
Titles & Deeds
Older properties in Morocco often have no deeds as such, but rather historic scrolls which document ownership, often detailing centuries of ownership. You could create an official deed and title by paying an additional fee of 1% to the notary during the transaction process.
An official title on a property ensures that banks will allow mortgages and any future re-sale can fetch a higher price with the presence of deeds. New properties tend to have existing deeds.
Inheritance Law
Be aware that inheritance laws in Morocco can confuse the process of purchasing property. Each person with a claim to a property must give the go-ahead for a sale. A local simsaar will deal with all the legalities that may arise from this, but the process can be lengthy.
Tax Considerations
The Moroccan tax system is based on the French model. Any capital gains from rentals are subject to annual Personal Income Tax at 15%, although an owner is exempt from this for the first 3 years of ownership. Property taxes are based on the property’s annual rental value with a 75% discount if the property is your permanent home or regular holiday destination.
Family members are exempt from Inheritance Tax, but a buyer must ensure they enlist local, professional expertise to draw up a Moroccan will, which does not revoke their existing one.
Legal Fees
Legal fees should set you back around 6 %, much less than the 10 to 15% in France and Spain. However, they may rise to 10% if building work needs to be done on the property.
Areas
One of the arrival ports to Morocco is Tangier. It was traditionally a truly cosmopolitan and fashionable haunt in the 1950s to 1970s amongst French and Spanish tourists and residents alike.
With its return to Moroccon rule, it has changed vastly into the rather tatty and undesirable port city it is today.
However Tangier will reduce its industrial intake of freight, redirecting it to the new Golden Mediterranean port being built between Tangier and Tetouan.
Meanwhile, the major property areas offering the widest choice of property are located around Tangier, along the Atlantic and the Mediterranean coasts. Tangier is only 35 minutes hydrofoil ride from mainland Spain. It is near to the Atlantic coast resorts and, in time, is predicted to return to its exclusive former status.
New developments are going up along the Atlantic coast, offering good value for money, while infrastructures such as road and rail links are constantly improving.
Inland areas such as Marrakesh and Fez are already very cosmopolitan and popular. Properties are high in demand and more expensive than in other areas.
Riads (old traditional houses set around a courtyard) are to be found in most cities and still represent realistic prices, whilst some may need some tender, loving care or renovation.