Real estate profits tax
TPI due on capital gain realized at sale of real estate (difference between sale price and updated acquisition price). Unified 20% rate, with abatements per holding duration.
Who is concerned
Any individual reselling real estate in Morocco achieving a capital gain. Companies taxed at IS on capital gains.
Deadlines
Declaration and payment within 30 days after transfer. Withholding at source by notary at sale. Regularization possible via annual IR declaration.
How it works
Capital gain = Sale price − Updated acquisition price (official DGI coefficient) − Acquisition fees (duties, notary) − Justified works. 25% abatement after 4 years holding, 50% after 8 years. Total exemption if held 5+ years and primary residence.
2026 rates and scales
Unified 20% rate on net taxable capital gain. Minimum contribution 3% of sale price (floor to avoid fictitious loss declaration). Primary residence exemption after 5 years continuous occupation.
Concrete example
Marrakech villa purchase 2020 at 2,500,000 MAD. Resale 2026 at 3,800,000 MAD. Updated price (coef 1.10) = 2,750,000 MAD. Purchase fees 9% = 225,000 MAD. Gross capital gain = 3,800,000 − 2,750,000 − 225,000 = 825,000 MAD. 25% abatement (6 years) = 618,750 MAD. TPI 20% = 123,750 MAD.
Exemptions
Total exemption: primary residence held 5+ years, inherited property resold within 5 years, exchanges without compensation. 25% abatement between 4-8 years, 50% over 8 years holding.
Declarative obligations
Declaration within 30 days with supporting documents (original purchase act, works invoices, various fees). Notary withholds TPI at source and remits to DGI. Tax compliance certificate needed for transfer.
Penalties for non-compliance
15% surcharge for late declaration. Capital gain audit possible 4 years after sale. Adjustment based on market value if declared price underestimated (DGI expert).
Legal optimization tips
- Keep all acquisition and works supporting documents (detailed invoices in owner's name)
- Wait 8 years holding to benefit from 50% abatement
- Have primary residence recognized (water/electricity/mail documents) for exemption after 5 years
- Reinvest capital gain in another property via dismemberment (usufruct/bare ownership) to defer taxation
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