Buying Property in Morocco - Buyers Guide Moroccan Real Estate

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Buying Property in Morocco - Buyers Guide to Purchasing Moroccan Property

The off plan property developments in Morocco are mainly gated and self-contained and consist predominantly of townhouses, apartments and villas. Most property developments in Morocco are geared towards to buy-to-let investments and therefor also function as holiday resorts and often offer a full set of concierge services.  Many developments are built on or near by golf courses and most feature a selection of restaurants, bars and cafes, leisure activities and spa facilities.  Property developments on the Mediterranean and Atlantic coast feature often some excellent marinas.

Morocco: An Emerging Property Market

Morocco is clearly a fast growing emerging property market. Despite a an average of 4% per annum economy growth since the early eighties, Morocco was until recently a difficult country to invest or do business in. The new king, In a drive to open up its free market economy to foreign investment, has instructed his government to reduce red tape and to streamline the bureaucracy and regulations that for so long stalled foreign investment and property development.

Morocco: Property Investment Climate

These conditions, together with Morocco’s natural and cultural attractions, are making Morocco one of the dynamic investment markets in the international real estate sector. The difference between current price levels and their growth potential offers both value for money and attractive investment potential, supported by the government’s drive to quadruple tourism visits by the year 2010.

Constant infrastructural improvements in the form of new roads, ports, technological facilities, airports and modern resorts are already reflected in the rapid growth of visiting tourists and foreign property buyers—a situation that is further accelerated by the Open Skies Agreement, which will link Morocco to Europe’s network of budget airlines and routes. Five areas on the Mediterranean and Atlantic coastlines have been earmarked for the development of major resort areas. They have already seen a high increase in tourist visits, with the French ranking top, followed by Spanish, British and Germans.

The government has done much to simplify the buying process for foreign nationals, yet as elsewhere, it remains important to work with an established agent and experienced lawyer when considering the purchase of a property in Morocco. Dealing with a recognised international agent will ensure that you receive the standard of service you are accustomed to at home, in your own language, and that the lawyer will be a reputable professional who can also explain things to you directly.

Morocco Property: The buying process

When you have found the Moroccan property you like, you can make a verbal offer via your estate agent. Once a purchase price is agreed upon a preliminary contract is drawn up. At this stage a qualified lawyer should be appointed who is fluent in your language. He or she will undertake the necessary checks on the property and prepare the documentation.

The buyer then needs to open a Euro account with a bank in Morocco and transfer sterling or euros to this account. This currency is then converted to dirhams, with which the seller is paid. A deposit of between 10% and 30% is generally paid to secure a property, with the balance due at completion. The process takes an average of 6 to 8 weeks and the property is then registered with the Moroccan government in the name of the new owner.

Buying Property in Morocco: Fees

As a general rule you should expect to pay around 6.5% of the property price. This covers lawyer’s fees, notary costs and registration.

• Property registration fees 2%
• Government taxes 2.5%
• Notary fees 0.5%
• Legal fees and various 1.5%
• VAT is currently 2.5% in Morocco. In the case of old houses or land, VAT is charged only on the notary and government registration fees, not on the property or land itself. VAT is, however, payable on newly built property, renovation work and off-plan purchases
• Mortgages
• Available in Morocco up to 70% of the purchase price or valuation
• The purchase can be made in euros, dollars or sterling
• Normally over 15 years maximum, but can’t be extended beyond normal retirement age
• Interest is negotiable at 5.5%-8%
• Proof of income is required

Buying Property in Morocco: The Law

The legal system is Latin-based and similar to that of France and Spain.

Buying Property in Morocco: Currency Exchange

Visitors to Morocco are not permitted to import or export the national currency (dirham), so it is necessary to change currency into dirhams locally. The Moroccan Central Bank (Bank Al Maghreb) fixes the value of the dirham using a basket of currencies including the euro, dollar and yen. Non-resident foreigners may freely exchange imported currency at the banks or at authorised institutions such as hotels, bazaars etc.

If you wish to re-export all or part of the currency imported, you need to sign a declaration for the importation upon entry to Morocco Net profits earned through the sale of a Moroccan property can be repatriated in other currencies to your home country, whether you are a resident or not. The only condition is to register the investment at the Moroccan Exchange Control Office beforehand.

Buying Property in Morocco: Pitfalls

Inheritance laws in Morocco don’t facilitate the buying process, as each person with a claim to a property must give their approval to the sale. A lot of older properties do not have title deeds and getting hold of the paperwork can take up to two years. There are traditional houses in beautiful, unspoilt cities available, but while they are often quite cheap you can expect to pay heavily for restoration costs.