Buying Property in Morocco

Buying a property | The Buying Process | Fees | Pitfalls

Buying Property in Morocco

By Michelle Cruz

Morocco, with its exotic culture, sights and impressions, has always fascinated the more adventurous of Western travellers. Early orientalists and French colonial rulers shared this passion for the mysteries of the Arab world while enjoying a privileged colonial lifestyle. The cosmopolitan port of Tangiers was especially favoured by the international set, drawing such luminaries as Orson Welles and Henry Matisse.

In more recent times, Morocco was first frequented by affluent young hippies and rock stars before becoming a favourite of a wealthy and sophisticated set that includes fashion designers Yves Saint Laurent and Jean Paul Gaultier, who both have houses in Marrakech. Recognising the architectural jewels in the old quarters of towns such as Marrakech, Essaouira and Fez, they introduced Morocco to a wider public with their exquisite design and renovation projects.

A new destination

Film stars, rock bands and magazine shoots have also helped promote Morocco’s exotic appeal, but it wasn’t until recently that it has been considered as a second-home destination for property buyers. The latter has largely been the result of a focused government policy that has streamlined its procedures and bureaucracy, and improved infrastructure in a drive to increase tourist visits and stimulate foreign investment.

The new developments that have resulted from this not only make Morocco attractive to a far broader audience than ever before, but they have also introduced the standards of construction, finish and financial security that foreign buyers demand—creating a property sector that makes Morocco one of the most popular international investment countries with foreign property buyers today.

Real estate on offer

There are two main types of property on offer in Morocco: traditional houses in the old quarters of historic towns and new, purpose-built off-plan resorts.

The former vary in size and shape but are often in need of renovation, while the new properties are usually located either in modern coastal resorts or close to historic centres such as Marrakech. Gated and self-contained, they mainly consist of luxury three-bed townhouses with pools, although a range of apartments and villas is also available. Most developments are geared towards rental management, so they offer a full set of resort and concierge services, often including golf, restaurants and spa—and in coastal areas marinas.

The buying environment

Morocco is clearly a country in development. Although its economy has been growing by an average of 4% per annum since the early eighties, it was until recently a very difficult country to invest or do business in. In a drive to open up its free market economy to foreign investment, the government has been reducing red tape and streamlining the bureaucracy and regulations that for so long formed a barrier to development.

Although some restrictions, such as currency control, still exist, the climate is an increasingly open and fluent one, in which foreign nationals are encouraged to open accounts, invest and own property in an environment which the authorities are working hard to make increasingly secure and attractive. Although this North African state is a Muslim monarchy, Morocco is blessed with political stability and a moderate, tolerant attitude towards religion.

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.

Buying a property

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.

The buying process

When you have found the property you like, you will 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.

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

The Law

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

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.

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.

Booking.com