When you sell property in Morocco as a foreigner, you pay a capital gains tax of 20% on the profit, with a minimum flat tax of 3% on the total sale price, even if you made no profit.
Most foreigners don’t know about that 3% minimum rule, and it catches people off guard at the notary.
If you bought during a currency fluctuation or renovated without official receipts, your “profit” on paper might look much higher than reality, which means you pay more tax than you should.
At a Glance: Selling Property in Morocco as a Foreigner
- Capital gains tax rate: 20% on net profit (sale price minus purchase price and allowable costs)
- Minimum tax: 3% of the total sale price, regardless of whether you made a profit
- Exemption: If the property was your primary residence for at least 6 years, you pay zero capital gains tax
- Repatriation of funds: You can only send money abroad if it came in as foreign currency originally and you can prove it
- Notary is mandatory: All property sales in Morocco must go through a licensed notary (adoul or notaire)
- Currency rule: Morocco has strict foreign exchange controls, profits must be repatriated through official banking channels
- Tax is withheld at source: The notary deducts the tax before you ever see your money
How the Moroccan Property Tax System Actually Works for Foreigners
Morocco taxes property sales under what is called the Capital Gains Tax on Real Estate, known locally as the TPI (Taxe sur le Profit Immobilier).
The tax is calculated on the difference between what you paid and what you sold for.
But it is not that simple.
The purchase price is adjusted for inflation using an official government coefficient.
That adjustment slightly reduces your taxable profit, which is good.
You can also deduct the cost of improvements, but only if you have official receipts and invoices, not cash payments made under the table.
If you cannot prove your renovation costs officially, they do not count.
The notary calculates everything and withholds the tax before releasing your funds.
You do not pay it yourself. It is taken from the sale proceeds automatically.
Step by Step: How Selling Property in Morocco Actually Happens
Step 1: Agree on a price with the buyer This is usually done through an agent or directly. Get everything in writing immediately.
Step 2: Sign a preliminary contract (compromis de vente) This locks in the price and terms. The buyer pays a deposit, typically 10%. If the buyer walks away, you keep the deposit. If you walk away, you pay double the deposit back.
Step 3: Both parties go to a notary. The notary verifies the title, identity, and legal status of the property. They also check for any outstanding mortgages or liens.
Step 4: The notary calculates your TPI tax They use the official purchase price, the inflation coefficient, and any documented costs. The minimum 3% of sale price is compared to the 20% of profit. You pay whichever is higher.
Step 5: Final deed is signed Called the acte de vente. Funds are transferred through the notary. Tax is withheld automatically.
Step 6: Repatriation of funds If you brought money into Morocco through official banking channels, you can send the proceeds back. You will need your original transfer documents (attestation de transfert) to prove the money came in legally. Without that document, the bank will not let you send money out.
Biggest Mistakes Foreigners Make When Selling Property in Morocco
Losing their original transfer documents This is the single most common problem I see. You brought money in years ago, you lost the bank attestation, and now you cannot legally repatriate your sale proceeds. Keep those documents forever.
Paying for renovations in cash I understand why people do it. It is cheaper in the moment. But when you sell, those costs are invisible to the tax authority. You end up paying tax on profits that were actually spent on the property.
Choosing an agent based on friendliness, not licensing. Many agents operating in the medinas of Marrakech and Agadir are not officially licensed. If a deal goes wrong, you have no legal recourse against them.
Signing a compromis de vente without a lawyer reviewing it. The preliminary contract is binding. Buyers insert clauses that heavily favor themselves. Have someone review it before you sign anything.
Not knowing about the 6 year exemption If you lived in the property as your main residence for 6 consecutive years, you pay zero capital gains tax. Many foreigners sell at year 5 and pay thousands they did not have to.
Hidden Risks Nobody Tells You About
Fake title deeds Morocco has two types of property: titled (immatriculé) and non-titled (melkia). Non-titled property is particularly risky. Ownership disputes, family claims from relatives of the original seller, and outright fraud all happen more with non-titled property. Always insist on a titled property with a registered titre foncier.
Co-ownership disputes Moroccan inheritance law means a property may technically have multiple rightful heirs. If the seller did not get consent from all co-heirs, the sale can be challenged in court years later. This has happened to foreigners who thought they had clean title.
Agent double dipping Some agents represent both buyer and seller and collect fees from both. They have no incentive to get you the best price. Ask directly: who are you working for in this transaction?
Currency traps If you bought property using cash brought in informally (not through a bank), you will struggle to send any proceeds abroad. The Moroccan central bank (Bank Al Maghrib) takes this seriously. This is not something you can fix at the last minute.
Undervalued sale price on the deed. Some buyers in Morocco ask you to declare a lower sale price on the official deed to reduce their transfer fees. This is illegal. If the tax authority audits, you are the one who faces penalties, not just the buyer. Never agree to this.
Costs, Taxes, and Real Numbers
Here is what you actually pay when selling:
| Cost | Amount |
|---|---|
| Capital gains tax (TPI) | 20% of net profit OR 3% of sale price (whichever is higher) |
| Notary fees (paid by buyer) | 1% of sale price |
| Agent commission | Typically 2.5% to 5%, negotiable, usually paid by seller |
| Certificate fees and admin | A few hundred dirhams, minor |
Example: You bought a flat in Marrakech for 1,200,000 MAD. You sell it for 1,800,000 MAD. Net profit before the inflation adjustment: 600,000 MAD. After the official inflation coefficient (say 1.15 over 5 years), the adjusted purchase price becomes 1,380,000 MAD. Taxable profit: 420,000 MAD. Tax at 20%: 84,000 MAD. 3% of sale price: 54,000 MAD. You pay the higher figure: 84,000 MAD.
That is roughly 7,000 euros at current rates, just in tax.
Add agent commission of 3% on 1,800,000 MAD: 54,000 MAD.
Total cost of selling: around 138,000 MAD before anything else.
How to Verify Everything Safely Before You Sell (or Buy)
Check the titre foncier at the Conservation Foncière This is the land registry. Anyone can request a copy of the title certificate for a property. It shows the registered owner, any mortgages, and any legal charges. Do this before signing anything.
Hire a notaire, not just an agent A notaire is a state-appointed legal official. They have professional liability. They are the only ones who can legally execute a property transfer in Morocco.
Use a bilingual lawyer. Contracts in Morocco are in Arabic or French. If you do not speak both, hire a lawyer who does. Never rely on the agent to translate important documents for you.
Check the tax status of the property. The notary can verify whether there are unpaid property taxes (taxe d’habitation, taxe de services communaux). Outstanding taxes become your problem if you buy without checking.
What I Have Seen Happen (Real Situations)
A couple from the UK bought a riad in Fes in 2017. They paid partly in cash, brought over in suitcases. When they tried to sell in 2022, they could not prove the origin of their funds. They were stuck. They could not repatriate a single dirham. They eventually had to find a local buyer and take payment inside Morocco. They lost access to over 800,000 MAD.
A retired man from France bought an apartment in Casablanca through a charming agent who turned out to be working for the developer exclusively. He paid 15% above market rate. When he tried to sell 4 years later, he could not find a buyer at that price. He sold at a loss and still owed the minimum 3% tax on the total sale price despite making no profit.
A woman from Germany paid a 10% deposit on a property in Essaouira. The seller then delayed the final sale for 18 months. There was no clear timeline in the compromis de vente. She eventually recovered her deposit through a lawyer, but lost almost two years.
These are not edge cases. I have seen versions of all three of these situations multiple times.
What Most Websites Won’t Tell You
The inflation coefficient helps you, but only slightly Tax advisors sometimes oversell this benefit. On a short hold period, the coefficient adjustment is minimal.
The 6 year exemption clock resets if you rent the property out Many foreigners rent their property on Airbnb, which is common in Marrakech and Agadir. If you do this and then claim the property as your primary residence, the tax authority may challenge you. You need to be consistent and have documentation proving it was your genuine residence.
Morocco is tightening enforcement on foreign-owned property Over the past few years, tax inspections on real estate transactions have increased. If you undervalue your sale price on the deed, you are taking a real legal risk, not just a theoretical one.
Some medinas have properties that cannot be titled Certain old medina properties have complex historical ownership that cannot be formally registered. Buying these is essentially buying a headache. Any agent who tells you “it’s fine, everyone does it” is not working in your interest.
Not all notaires are equally thorough Some notaires are very diligent. Others rush through transactions. Ask specifically: will you check for all co-heirs and all outstanding charges? Get that commitment in writing.
FAQ: Selling Property in Morocco as a Foreigner
Can foreigners own and sell property in Morocco? Yes. Foreigners can legally own and sell property in Morocco with the same rights as citizens, with one key condition: money used to buy must have entered Morocco through official banking channels to be repatriated later.
What is the capital gains tax rate for foreigners selling property in Morocco? The TPI rate is 20% on net profit, with a minimum of 3% on the total sale price, even if you sold at a loss. If you lived in the property as your primary residence for 6 consecutive years, you are fully exempt.
How do I verify that a property has clean title in Morocco? Request the titre foncier from the Conservation Foncière (land registry). This document shows the registered owner, any mortgages, and any legal claims. Do this before signing any preliminary contract.
Can I send my sale proceeds back to my home country? Yes, but only if you can prove the original purchase funds entered Morocco through an official bank transfer. You need the original attestation de transfert from your bank. Without it, repatriation is very difficult.
Do I need a lawyer or just a notary? You need both for proper protection. The notary is legally required and handles the official deed. A bilingual lawyer reviews contracts, spots unfavorable clauses, and protects your interests before you reach the notary stage.
What happens if I paid cash for renovations and cannot prove the costs? Those costs cannot be deducted from your taxable profit. You will pay tax on a higher profit than you actually made. This is a common and expensive mistake that is very hard to fix after the fact.