This is an income tax levied on the profit realised on the sale of a property.

Cases where exemption applies

There is a total exemption from property gains tax in the following cases:

• Sale of a property with a total value not exceeding one hundred and forty thousand dirhams;
• Sale of a property* (or part thereof) used as a principal residence** for at least five years (as at the date of sale), whether by the owner or by members of property companies (which are tax-transparent). The exemption remains applicable if the property has been vacant (after the minimum period of five years), provided that the sale takes place within one year of the date on which the vacancy began.
  It is important to note that where the sale price of such properties exceeds 4,000,000 dirhams, a minimum tax rate of 3 per cent is applied to the portion exceeding this threshold.
• Sale of social housing that has been used as a main residence* for at least four years (as at the date of sale), provided that the floor area is between 50 and 80 m² and that the amount (excluding VAT) of the sale does not exceed 250,000 dirhams;
• Transfers free of charge (of immovable property or rights in rem relating to immovable property) between ascendants and descendants, between spouses, between brothers and sisters, or between the person acting as Kafala and the child in their care pursuant to an order of the guardianship judge;
• Transfer, between co-heirs, of undivided rights in agricultural properties situated outside urban areas.

* This also applies to the land on which the building stands (up to a maximum of five times the covered area).

** Property in Morocco used as a residence by a Moroccan national living abroad (neither let nor used for business purposes) or occupied, free of charge, by the spouse, first-degree direct ascendants or descendants.

Tax rate

Any profit realised on the disposal, before the end of the exemption period, of built property is subject to tax at a rate of 20 per cent, with a minimum tax of 3 per cent (of the disposal price) even where no profit is made.

The 20 per cent rate also applies (since 1 January 2013) to net profits realised on the first disposal, for consideration, of undeveloped land (or real property rights relating to such land) situated within an urban area.

Electronic declaration of property gains and payment of income tax

It is compulsory to declare* capital gains and to pay the relevant income tax (where applicable) electronically.

In order to complete these procedures, taxpayers may first seek guidance from the tax authorities regarding the factors used to determine the net taxable property gain and the amount of the corresponding tax, or their entitlement to an exemption from this tax.

This application must be made electronically, using a form provided by the authorities, within thirty days of the date on which the preliminary sale agreement was signed. It must be accompanied by the necessary supporting documents (see ‘Documents to be provided’).

* In the case of co-owners of a property, each of them must submit their own declaration of property profits and pay the relevant tax. Co-owners are taxed in proportion to the shares held by each of them in the joint ownership.

• Pension from a foreign source
• Income from property