Tax Implications of owning property

[bess]

Hi Tangier - irt would be helpful if you gave some details rather than a scare story?

[Tangier]

Originally Posted by bess

Hi Tangier - irt would be helpful if you gave some details rather than a scare story?

What the agents tell you about owning a property in Morocco Tax property tax rental its not true.

You must own yor property NOW for 8yrs or more-not to pay any tax. when i had my house it was 5yrs. i sold it after 5yrs but was told that i still had to pay 20% tax.

Thats all the Agents will try and do is sell you the property then thats it.

Now i rent my property.

Its up to you thats what a moroccan will say its your money.

And thats true??????

[lurcher21]

Originally Posted by Tangier

Hi i have been there and done it its not like he has said it will do your head in now i have sold my property i am going to invest in spain ????? good luck

Me too! Buyers beware - the Moroccan Government steals from you as much as other individuals. Our property was sold for a genuine, 100% declared, amount, and then we were hit by the bombshell of a revision of TPI tax on 50,000 euros extra of non-existent 'profit' as they said the house was worth more than we sold it for when property prices were rising monthly and the sale of the house had taken 5 months to complete!

[Tangier]

Originally Posted by lurcher21

Me too! Buyers beware - the Moroccan Government steals from you as much as other individuals. Our property was sold for a genuine, 100% declared, amount, and then we were hit by the bombshell of a revision of TPI tax on 50,000 euros extra of non-existent 'profit' as they said the house was worth more than we sold it for when property prices were rising monthly and the sale of the house had taken 5 months to complete!

Like is said its one tax for us and one tax for a moroccan it makes me sad that thay want the investment but thay want to take all the tax.

The agents here tell you no tax to pay for 5yrs ( this is not True ) as soon as you buy a property the Tax Bill starts and with a not a moroccan name its on the value on the house ( when i had my house i was paying 2500,dh the house next door owner Moroccan was paying 300dh per year)

Let me tell you if you sell your Property for a loss or the same price as you paid for it you will have to pay a TAX.

Thay will not accept that you have not made a profit on the sale of the property...

In Morocco the agent and the builder will ask you to declare Half Dont .............

[moroc]

This Is scary stuff I seriously whant to buy in Morocco but these stories are giving me secound thoughts, any body got success stories

[esmerelda]

Originally Posted by moroc

This Is scary stuff I seriously whant to buy in Morocco but these stories are giving me secound thoughts, any body got success stories

Ok there is a difference between tax you pay for service (garbage collection etc) and capital gains tax that is payable when you sell your property. This thread is mixing these 2 up!
Service taxes are variable by district & are payable as & when you own your property. CGT only on when you sell your house. There ARE different rules for resident moroccans, expat moroccans and foreigners...this is not something that happens in an underhand way but is clearly stated policy.
For foreigners as it stands there is no CGT to pay IF you own your property for 10 years and then sell. If you sell before then, there is a sliding scale dependent on how long you have had the property.
Re price declared. There is a difference between the declared sale price and the actual sale price....this has been common practice for many years as a way to underpay tax & I would not be surprised if the gov. were starting to crack down on it...it does not affect new build properties (or should not) as the prices for these are all clearly marketed ..it DOES affect resales particulalry of older properties. ..be wary of this as of course as the new owner if you agree a lower declared price then when you come to sell...your paper profit is higher than it actually was...so you get stung with a higher tax bill (unless you can convince the new owner to take a lower declared price...& so the circle goes on!!!) DO NOT think this practice is solely the preserve of moroccans ...expat owners will try this one too. Hope this helps

[bess]

Thank you for putting it so clearly.
It is worth pointing out that if you have shared ownership, ie you own an apartment in a block,the service charges are decided by an elected comittee which appoints the company or person who carries out the work.
For example on costs, Moroccans may prefer to have the pool in use only in the high season, the English are more immune to cold water and might be sad if it is drained- but obviously if the cost is shared there has to be general agreement.
You might want to bear this sort of issue in mind if investing in an apartment already built - find out what the service charges have been and what they are spent on, it is difficult to have influence later if you do not speak the language of a discussion.
Personally I think it is fair that foreigners pay different tax to Moroccans, especially if we are buying to invest: hopefully both we and Morocco can gain overall.

[Tangier]

Originally Posted by esmerelda

Ok there is a difference between tax you pay for service (garbage collection etc) and capital gains tax that is payable when you sell your property. This thread is mixing these 2 up!
Service taxes are variable by district & are payable as & when you own your property. CGT only on when you sell your house. There ARE different rules for resident moroccans, expat moroccans and foreigners...this is not something that happens in an underhand way but is clearly stated policy.
For foreigners as it stands there is no CGT to pay IF you own your property for 10 years and then sell. If you sell before then, there is a sliding scale dependent on how long you have had the property.
Re price declared. There is a difference between the declared sale price and the actual sale price....this has been common practice for many years as a way to underpay tax & I would not be surprised if the gov. were starting to crack down on it...it does not affect new build properties (or should not) as the prices for these are all clearly marketed ..it DOES affect resales particulalry of older properties. ..be wary of this as of course as the new owner if you agree a lower declared price then when you come to sell...your paper profit is higher than it actually was...so you get stung with a higher tax bill (unless you can convince the new owner to take a lower declared price...& so the circle goes on!!!) DO NOT think this practice is solely the preserve of moroccans ...expat owners will try this one too. Hope this helps

Ok why Should there be a difference between the tax-- if you live here you should pay the same no matter what we all pay the same in the UK and spain and france ......
One more thing Difference between DECLARED AND UNDECLARED black or white thats up to you but i would say never do this.... there is a case in Tangier in the last week that was going on and the Moroccan Man that sold is in prison doing 5yrs the english person has lost the property so i would say that is bad advice.

Any way thay know whats going on and the price of property in Morocco

My advice is keep it white Never do Black you could end up in Prison .......

[lurcher21]

Originally Posted by Tangier

Ok why Should there be a difference between the tax-- if you live here you should pay the same no matter what we all pay the same in the UK and spain and france ......
One more thing Difference between DECLARED AND UNDECLARED black or white thats up to you but i would say never do this.... there is a case in Tangier in the last week that was going on and the Moroccan Man that sold is in prison doing 5yrs the english person has lost the property so i would say that is bad advice.

Any way thay know whats going on and the price of property in Morocco

My advice is keep it white Never do Black you could end up in Prison .......

Do this and you could still get 'stung' for extra capital gains tax - just like we did. We honestly declared the full selling price - what good did that do us. They still stung us for CGT on the extra they said the property was worth. And ours was a villa we had built ourselves - after buying a plot of land. And one of us is a native speaker of the language. My advice after our nightmare is ''Don't buy!'' It's like a minefield for unsuspecting and naive foreign buyers. Everyone is out to rob you! Be warned.

[bess]

Hi Tangier- I suppose I was thinking more of those buying holiday propert/investment, perhaps it is different if you are a non Moroccan living and working there. Investers or those in receipt of high 'foreign ' wages can probably afford more than the average Moroccan. If the investment opportunities were equally as lucrative in our own country we probably would not invest in property abroad, so maybe it is fair that they should make more profit from us?