5 Things to Keep in Mind Before Renting Your Property in Morocco

Morocco is now one of the most popular real estate investment destinations in the world. Several international investors who buy property in Morocco do not use it personally. Instead, they like to set up rental income in Morocco. To rent out your property without any hassles, here are the 5 key things to keep in consideration.

1-Freedom to fix rent
The tenant and the landlord can decide upon the rent among themselves. You will need help of a notary with negotiations and translation of the local language and in having the rent papers drawn up properly and correctly. Though, as landlord, you can negotiate rent yourself, you will need to know the prevailing market rate for obvious reasons.

2-Landlord control
Moroccan laws are highly helpful for the landlord. Some of the key points to know are: the landlord can ask for a security deposit of not more than two months’ rent from the tenant. This deposit will have to be returned to the tenants upon handing over the keys by the tenant. Further, the landlord can deduct an amount for damages if required and proven. A landlord can also ask the tenant to name a guarantor who will be responsible for paying damages or rent in case the tenant is unable to do so.

3- Tax benefit
An international investor is free from tax on rental income in Morocco for the first three years. After three years, the investor has to pay from 22% to 44% tax on 60% of the rental income of his property in Morocco. No tax is payable on the property value for the first five years after which it is levied at 13.5% per annum. Landlords also do not need to pay Garbage collection tax for five years from the date of purchase of land. Thereafter, tax is charged as 10% of the annual rental value of the property.

4-Currency issues
The Moroccan currency cannot be imported or exported. Foreign investors have to open an account with a local bank for all financial transactions. International investors have to sign a declaration for the import of currency at the time of entry. The declaration also covers profit repatriation if the property is resold. The property is also registered at the exchange control office before purchase. A good notary will be able to help you with these procedures.

5-How to choose hot spots
Morocco offers properties both on the Mediterranean Sea and Atlantic Ocean coastlines. Pace of development is still slow on the Atlantic side as compared to the Mediterranean side. You can get land at cheaper rates on the Atlantic coastline but rent will also be low. Rental property can also benefit from development programmes initiated by the Moroccan government.

Rental value is sure to escalate in these areas. The Moroccan government is also boosting tourism so look for areas which are particularly lucrative for setting up rental property.

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