Capital Gains Tax on Real Estate in Morocco
Capital Gains Tax on real estate, called Taxe sur le Profit Immobilier (TPI), applies when you sell a property in Morocco and make a profit. It is calculated on the net capital gain after deducting eligible expenses, with a legally confirmed rate.
What is TPI in Morocco?
TPI is the tax owed by the seller – resident or non-resident – when selling a property in Morocco. The standard rate is generally 20% of the net capital gain.
How is taxable capital gain calculated?
Sale price and purchase price
The gross capital gain is the difference between the declared sale price and the adjusted purchase price.
Eligible expenses
Acquisition costs (notary, registration fees), certain renovations, and other eligible expenses can be deducted from the gross capital gain.
Net capital gain calculation
Net capital gain = Sale price - Adjusted purchase price - Eligible expenses. TPI is then applied on this amount.
Illustrative examples of TPI calculation
| Property | Purchase Price | Expenses & Renovations | Sale Price | Net Gain | TPI Tax |
|---|---|---|---|---|---|
| Apartment sold for 1,200,000 MAD | 850,000 MAD | 60,000 MAD | 1,200,000 MAD | 290,000 MAD | 58,000 MAD (20%) |
| House sold for 2,000,000 MAD | 1,500,000 MAD | 100,000 MAD | 2,000,000 MAD | 400,000 MAD | 80,000 MAD (20%) |
| Land sold for 800,000 MAD | 500,000 MAD | 25,000 MAD | 800,000 MAD | 275,000 MAD | 55,000 MAD (20%) |
Confirmed tax rates
| Situation | Rate | Notes |
|---|---|---|
| Standard TPI | 20% | Applied on net capital gain. |
| Minimum Contribution | 3% | Legal minimum if net gain is low or zero. |
Applicable legal exemptions
Primary residence
Selling your primary residence may be exempt from TPI if it has been used as the main home for a certain number of years (usually ≥ 6 years according to administrative interpretations).
Family transfers
Exemptions apply when selling between close relatives (parents/children, spouses) under legal conditions.
Social housing
Sales of social housing can benefit from specific exemptions, especially if holding and usage requirements are met.
Tax clearance and obligations before sale
In practice, a notary may require a tax clearance certificate before registering the deed, confirming that all taxes (TPI, housing, local services) are paid up to date.
Who pays the TPI?
The seller is responsible for paying TPI. The notary usually collects the tax at the time of signing the deed and transfers it to the tax authorities.
FAQ - Capital Gains Tax
Does TPI apply to all properties?
Yes, all properties generating a capital gain are subject to TPI unless legal exemptions apply.
Does holding period reduce the tax?
Unlike some countries, there is no automatic annual reduction for holding period under current Moroccan tax law.
What are the main exemptions?
Primary residence (conditions), family sales, social housing under specific conditions.
What happens if I do not pay TPI?
The notary may block the sale without a tax clearance, and penalties or tax recovery actions may be applied.
Should I consult a tax expert?
Yes, to optimize your situation regarding exemptions, supporting documents, and precise procedures.