Real Estate Taxation in Morocco for French Nationals: Local Taxes, Capital Gains, and Tax Treaty

Published on May 26, 2026 and written by Cyril Jarnias

Moving to the sun, buying a pied-à-terre in Marrakech or an apartment in Casablanca, renting out your property remotely while remaining a French tax resident… More and more French people are taking an interest in Moroccan real estate. But behind the attractive prices and lifestyle, one question consistently arises: how does real estate taxation in Morocco actually work for a French person, and how does it interact with the France-Morocco tax treaty?

General Framework: Where is Tax Paid When the Property is in Morocco?

The starting point is simple: the tax treaty between France and Morocco establishes the principle that income related to real estate is taxed in the country where the property is located. In other words, an apartment or villa in Morocco generates, by definition, Moroccan-source income.

Concretely, this means for a French person who owns property in Morocco:

– rental income from this property is taxable in Morocco;

– capital gains realized upon resale are taxable in Morocco;

– local taxes (property tax, communal services tax, tax on undeveloped land, etc.) are owed in Morocco.

For real estate, the rule is particularly clear: real estate income (rent and capital gains) are exclusively taxable in the state where the property is located, i.e., in Morocco. France may take this income into account for calculating an effective rate (exemption with progression in some cases), but does not tax it a second time when the treaty provides for exclusive taxation.

Moroccan Real Estate Taxation: The Main Pillars to Know

For a French person investing in Moroccan property, taxation is structured around four pillars:

Each of these pillars follows specific rules, which apply regardless of nationality: in the eyes of the Moroccan tax authorities, a French person, a Moroccan living abroad, or a foreign non-resident are subject to the same rates on the same property.

Rental Income: How are Rental Revenues Taxed in Morocco?

In Morocco, rental income from real estate is taxed in the category of property income. The treatment depends on the owner’s status (Moroccan resident, non-resident, MRE) and, increasingly, on the withholding tax regime.

Taxable Base: From Gross Rent to Taxable Income

The principle remains constant: start with gross rents collected over the year, possibly increased by certain charges passed on to the tenant, then apply deductions or subtract expenses depending on the applicable regime.

For individuals, the standard rule is a flat 40% deduction on gross rents, which is deemed to cover all expenses related to renting (routine maintenance, minor repairs, non-recoverable charges, etc.). Some texts even mention a 50% deduction for new housing during the first three years of rental.

Once this deduction is applied, the net property income thus determined is subject to income tax (IR), with progressive brackets up to 38% for the highest income levels.

Withholding Tax on Rents: A Growing Mechanism

To secure collection, Morocco has generalized withholding tax on rents. When a tenant is a company or similar entity, it is often required to withhold part of the gross rent and pay it directly to the tax administration.

For individuals, the logic is as follows:

Recent reforms further strengthen this trend: the 2026 Finance Law extends withholding tax to most rents paid by professionals.

For a French person renting their apartment to a company or business in Morocco, it is therefore common for the tenant to deduct the tax automatically. This deduction is then creditable against the final tax, or releases the owner definitively if the regime provides for a “discharge” withholding.

Option for a 20% Flat Tax on Real Estate Income

An important development for individuals is the introduction of a flat 20% tax on real estate income, presented as “discharge.” The owner who opts for this regime pays 20% on the relevant income and, in return, no longer has to include these rents in their overall income tax return.

Specifics for Non-Residents and MREs

Non-residents (including French people who remain tax resident in France) are taxed in Morocco only on their Moroccan-source income. Recent laws have clarified the regime applicable to their rental income:

– in several cases, withholding tax on rents becomes final tax, without the obligation to file an annual return for this income, particularly for MREs;

– the final withholding rates are around 10% up to 120,000 MAD of annual rents, 15% between 120,001 and 600,000 MAD, and 20% above, for certain non-resident profiles.

The France-Morocco treaty confirms the principle: real estate income is taxable in the state where the property is located. In practice, a French tax resident who receives rent from an apartment in Rabat is taxed on those rents in Morocco. France, in turn, takes this income into account for its overall calculation, but must avoid double taxation by applying a tax credit or exemption with progression, depending on the interpretation of the treaty.

Capital Gains: Understanding the TPI in Morocco

When you resell a property in Morocco at a gain, you are in principle liable for the Tax on Real Estate Profits (TPI), the Moroccan equivalent of the tax on real estate capital gains. This system is one of the key points for a French investor.

Who is Subject to the TPI and Who Pays?

The TPI applies to:

– Moroccan residents;

– Moroccans living abroad (MRE);

– foreign residents or non-residents, including French people.

There is no special regime for foreigners: same rates, same rules. The taxpayer is the seller, but in practice, it is the notary who calculates, withholds, and pays the tax, directly deducting the amount from the sale price at the signing of the final deed.

The seller therefore only receives the proceeds of the sale after deduction of the TPI. The notary generally has a period of about thirty days to settle the matter with the General Directorate of Taxes (DGI).

Rate and “Minimum Contribution”

The TPI is structured around two parameters:

– a standard rate of 20% applied to the net capital gain;

– a minimum contribution of 3% of the gross sale price, due even if the calculated net capital gain is low or zero.

The final TPI amount is the higher of the following two amounts:

– 20% of the net taxable capital gain;

– 3% of the sale price (minimum contribution).

Calculating the Net Capital Gain: The Main Mechanisms

The calculation follows a precise logic:

– 1. Start with the sale price stated in the notarized deed. Under-declaring the price is considered fraud. 2. Determine the revalued acquisition price, by multiplying the purchase price by a coefficient published by the DGI to account for inflation. 3. Add to the revalued acquisition price the deductible fees and expenses:

– acquisition costs (registration fees, notary fees, stamps, etc.);

– investment and major improvement expenses (structural renovations, extensions, major restructurings, etc.);

– certain loan interest related to the acquisition.

When actual acquisition costs cannot be documented, the law allows a flat 15% of the purchase price, deemed to cover all acquisition costs. If, on the contrary, supporting documents show that actual costs exceed 15%, the actual amount may be used.

The formula for net capital gain is therefore:

Net capital gain = Sale price − (Revalued acquisition price + acquisition costs + deductible investment expenses)

Then:

Theoretical TPI = 20% × net capital gain Minimum contribution = 3% × sale price TPI due = the higher of the two amounts.

Worked Example of TPI Calculation

Imagine a French person reselling an apartment in Casablanca:

– sale price: 2,000,000 MAD;

– initial purchase price: 1,000,000 MAD;

– revaluation coefficient: 1.20 (hypothetical);

– flat acquisition costs: 15% of 1,000,000 = 150,000 MAD;

– eligible work with invoices: 150,000 MAD.

The revalued acquisition price is 1,000,000 × 1.20 = 1,200,000 MAD.

Total cost to deduct: 1,200,000 + 150,000 + 150,000 = 1,500,000 MAD.

Net capital gain: 2,000,000 − 1,500,000 = 500,000 MAD.

Two calculations:

– 20% of 500,000 = 100,000 MAD;

– 3% of 2,000,000 = 60,000 MAD.

The TPI due will therefore be 100,000 MAD, as it is the higher amount.

TPI Exemptions: Primary Residence and Small Amounts

The laws provide several exemption regimes, particularly important for French people who settle permanently in Morocco and occupy their home:

For Moroccans living abroad as well as foreigners, the primary residence may also qualify for exemption, provided that actual occupation of the home during the required period is demonstrated. Here again, invoices, children’s school certificates, or various attestations are decisive.

Role of the Notary and Seller’s Obligations

In the case of a sale, the notary plays a central role:

– they collect the documents: land title, purchase deed, proof of work, tax identification number, certificates of local taxes paid;

– they calculate the TPI, apply the rate, check for any exemptions;

– they withhold the tax from the price and remit it to the DGI.

The French seller generally has no direct steps to take with the Moroccan tax authorities for this capital gain: everything is done through the notary. However, as a French resident, it is their responsibility to declare the sale to the French tax administration, mentioning the TPI paid in Morocco, so that the treaty applies and avoids double taxation.

Moroccan Local Taxes: Property Tax, Communal Services, and Undeveloped Land

Alongside taxation on income and capital gains, every owner of property in Morocco, resident or not, must pay local taxes.

Property Tax (TH): The Moroccan Equivalent of Property Tax

The property tax is due for any residential building. It is calculated on the basis of a rental value determined by the administration, regardless of the rent actually received.

The mechanism is as follows:

– the annual rental value is assessed (based on location, size, condition of the property, amenities, etc.);

– if the home is occupied as a primary residence, only 25% of this rental value is subject to the TH (implicit 75% deduction);

– on this basis, a progressive scale is applied:

For new constructions, a 5-year exemption from property tax is granted when it is the primary residence.

Communal Services Tax (TSC): Funding Local Services

Alongside the TH, Morocco levies a Communal Services Tax (TSC), intended to fund municipal services (roads, lighting, cleanliness, etc.). It is also calculated on the rental value, with rates generally 10.5% in urban areas (and about 6.5% if the property is vacant or in a peripheral zone).

The calculation base may take the base after primary residence deduction. Both taxes – TH and TSC – often appear on a single tax notice, sent to the property’s address or available online via the Moroccan tax portal.

Depending on the city, the combination of TH + TSC often represents 0.2% to 0.8% of the market value of the property each year, i.e., for an apartment valued at 1.5 million dirhams, around 3,000 to 12,000 MAD per year.

Tax on Undeveloped Land (TNB): A System Undergoing Reform

For owners of vacant land, a specific tax applies: the Tax on Undeveloped Land (TNB). It aims to limit speculative land hoarding in urban areas and encourage construction.

– well-equipped zone (roads, water, electricity, sanitation, lighting, public facilities, transport): 15 to 30 MAD/m²;

– moderately equipped zone (at least passable roads and water/electricity networks): 5 to 15 MAD/m²;

– poorly equipped zone: 0.5 to 2 MAD/m².

Each municipality must map its infrastructure, classify sectors, and set exact rates within these ranges, under the supervision of the governor. The new rates will apply from January 1 following the adoption of fiscal deliberations.

Certain exemptions remain:

For a French person owning a large buildable plot in an urban center, this reform can significantly increase the TNB, up to several tens of thousands of dirhams per hectare per year.

Declarations, Payment, and Penalties

Local taxes are subject to strict deadlines:

– the TNB must generally be declared and paid before March 1 of each year;

– the property tax and TSC give rise to a tax notice sent by the administration, with a payment deadline usually around September 30.

Late payments are penalized with surcharges (10% initial penalty, then 0.5% per month of delay, or more for certain taxes).

Modernization is underway: most payments can be made online at tax.gov.ma or via the apps of major Moroccan banks.

Purchase and Resale: Registration Fees, Costs, and the 2% Surcharge

Although it goes slightly beyond “local taxes,” this remains central for a French investor: what are the tax costs when acquiring and reselling a property in Morocco?

Upon Acquisition: Mandatory Fees and Costs

For a standard residential purchase, several items are mandatory:

– registration fee: 4% of the sale price (3% for certain social housing);

– land registry costs (recording the land title): generally around 1.5%;

– notary fees: approximately 0.5 to 1.5% depending on the scale, excluding VAT, plus small fixed costs (stamps, archive extracts, etc.).

Overall, a buyer – French or otherwise – should expect about 6 to 7% of the purchase price for these strictly mandatory costs, and 8 to 11% including agency commissions, translations, legal checks, etc.

2% Surcharge for Non-Traceable Payments

Recent finance laws have introduced a deterrent mechanism against cash payments: a 2% surcharge on the price, added to the 4% registration fee, is due when payment is not made via traceable banking methods (certified bank check, transfer, regulated instrument).

The objective is twofold:

– to combat under-declaration of prices and money laundering;

– to secure traceability of the origin of funds, a condition essential for being able to repatriate the proceeds of the sale abroad later.

Upon Resale: Agency Commission and Notary

Upon resale, the main costs are:

– agency commission: generally 2.5 to 5% of the sale price, often borne by the seller, negotiable;

– notary fees on the buyer’s side: the buyer pays the registration fees and land registry costs, as in an initial purchase;

– TPI: due by the seller, as detailed above.

These agency commissions and certain costs directly related to the sale are, in part, deductible from the capital gain for TPI calculation, provided they are properly invoiced.

France-Morocco Tax Treaty: How It Protects the French Taxpayer

The tax treaty between France and Morocco, signed in 1970, has two main objectives: avoid double taxation and combat tax evasion. For a French individual investing in Moroccan real estate, its concrete effects are essential.

Allocation of Taxing Rights for Real Estate

For real estate income (rent within the meaning of the article on income from real property):

– the country where the property is located (here Morocco) has the right to tax this income;

– for a taxpayer resident in France, France may require the declaration of these rents, but must grant a tax credit or exemption with progression mechanism, so as not to tax the same income twice.

For real estate capital gains:

For a French person reselling a property in Morocco with a capital gain, the effect is as follows:

Tax Residence and “Tie-Breaker” in Case of Conflict

A frequent question concerns taxpayers with a foothold in both France and Morocco. Can one be a tax resident of both states? Under domestic law, yes; but for the application of the treaty, only one residence is retained.

The treaty provides successive criteria to decide:

1. location of the permanent home (dwelling permanently available); 2. center of vital interests (family, professional activity, main assets); 3. place of habitual abode (where you spend the most time); 4. nationality; 5. mutual agreement between tax administrations.

For real estate taxation, this debate mainly matters for other categories of income (salaries, pensions, dividends). Real estate, however, remains tied to the country where the property is located, regardless of the exact residence status.

Practical Examples for a French Investor

To better understand the concrete impact of these rules, let’s consider a few typical scenarios.

Example 1: French Resident in France, Owner-Landlord in Marrakech

A French person, tax resident in France, owns an apartment in Marrakech that they rent for 8,000 MAD per month, i.e., 96,000 MAD per year.

– In Morocco:

– Moroccan-source property income, taxable locally;

– flat 40% deduction: net base = 57,600 MAD;

– application of a proportional rate (10% or progressive scale depending on the exact regime) on this base;

– if the tenant is a company, possible withholding at source at a rate of 10% on gross rents, constituting a prepayment or a discharge tax depending on the case.

Example 2: Resale of an Apartment in Casablanca with a Capital Gain

Same investor, reselling their apartment after 10 years with a significant capital gain.

– The TPI is calculated in Morocco, with the 20% / 3% mechanism;

– if the apartment was their primary residence for more than 6 years, they may benefit from a full TPI exemption; if not, the TPI is due in accordance with the rules described above;

– the notary withholds and remits the tax, the taxpayer receives the balance.

Example 3: Ownership of Vacant Land on the Outskirts of a Large City

A French person holds, through a direct purchase or inheritance, a vacant plot within the perimeter of a large municipality. The TNB reform reclassifies their plot as a “well-equipped zone”.

– On 1,000 m², with a rate set by the municipality at 25 MAD/m², the annual TNB would be 25,000 MAD;

– without construction or a concrete project, keeping this land becomes costly in the long term;

– upon resale, the capital gain will be subject to TPI at a rate of 20% or 30% depending on the exact nature of the land (and always a minimum contribution of 3% of the sale price).

Here, the investor would be well advised to make a quick decision: build, sell, or possibly transfer the property into a suitable structure, after consulting a tax advisor.

Points of Caution for a French Person Investing in Morocco

Several classic mistakes can be costly:

Summary: A Precise but Readable Tax System for a Prepared Investor

For a French person buying, renting, or reselling property in Morocco, the tax system may seem complex at first glance. In reality, the main principles are relatively stable:

A well-informed French investor who ensures banking traceability, scrupulously keeps invoices, and correctly declares income in both France and Morocco can thus take advantage of the opportunities in the Moroccan real estate market without any unpleasant tax surprises, while fully meeting their obligations to the two administrations.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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