CITY STAR, Luxury Villa in Marrakech

Purchasing a property, including a luxury villa for sale in Marrakech, involves various charges and taxes that need to be paid. One tax that is often overlooked in Morocco is the housing tax and communal services tax. At CityStar Marrakech, we provide you with all the necessary information about this tax, including recent tax changes.

Previously known as the urban tax, the housing and communal services tax is a tax payable by any person who owns real estate intended for residential use, whether it is a primary or secondary residence.

The housing tax and communal services tax are levied annually on buildings and constructions of all types that are fully or partially occupied by their owners, either as a primary or secondary residence, or generously made available to their spouse, direct relatives, or descendants for residential use. This includes the land on which the properties are built, as well as adjacent land such as courtyards, driveways, and gardens when they form immediate extensions of the property.

Tax Base for the Housing Tax

Any property that is occupied is subject to the housing tax, whether it is a primary or secondary residence. The tax is mainly calculated based on the annual rental value of the property, which is determined by averaging the values of comparable properties listed in the same sector. This value is updated with a 2% increase every five years.

Calculation of the Housing Tax

The housing tax = The annual rental value x The rate corresponding to the rental value bracket – The deduction amount.

The rate applied varies according to the rental value bracket:

• Between 0 and 5,000 DH = 0%
• Between 5,001 DH and 20,000 DH = 10% with a deduction of 500 DH
• Between 20,001 DH and 40,000 DH = 20% with a deduction of 2,500 DH
• Over 40,000 DH = 30% with a deduction of 6,500 DH

Exemptions from the Housing Tax

Properties that are fully exempt from the housing tax:

• During the entire duration of their mortgage and for the 15 years following the loan’s completion, affordable housing properties.
• Buildings owned by the State, declared public utility associations, and charitable organizations subject to the State.
• Royal residences and Habous properties.

Properties eligible for tax deductions:

• Properties that benefit from a 75% tax reduction include primary residences occupied by a family member (spouse, ascendant, or descendant), members of real estate companies, and Moroccans living abroad.

Payment Deadlines and Penalties

The tax notice is typically sent at the end of March, with an 8-week payment deadline. If the payment exceeds this deadline, a 10% penalty is applied, increasing by 5% in the first month and decreasing to 0.5% for the following months.

Methods of Paying the Housing Tax

Anyone wishing to pay the housing tax can visit the administrations mentioned in the tax notice, make a bank transaction, or pay online via the General Treasury of the Kingdom website at www.tgr.gov.ma.