| Purchasing Process |
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See generic Purchasing Process in addition to this section.
Most properties will be freehold but in most cases of old houses, deeds will need to be created. New properties tend to have existing deeds.
A buyer will generally have to pay at least a 10% deposit, the normal time to completion is 6/8 weeks and the buyer will need to return to complete the purchase.
Do I need to travel to Morocco to sign contracts?
It is possible for clients to give the power to a third party of their choice to sign paperwork/ documentation on their behalf in Morocco, by way of Power of Attorney. This service is offered by some lawyers, whereby an employee signs contracts on your behalf, at the Notaire's office in Morocco. To exercise a Power of Attorney document, property buyers would need to take the appropriate document to the local notary for example in the UK, where your signature is witnessed. The document will then be sent off to the Foreign and Commonwealth office in London, where this document will be sealed and authenticated with the Apostille Stamp.
When can I sell?
If your Compromis de Vente contains a Clause de Substitution, you may sell your property to a person of your choice before completion. If this is your intention, you must ensure that such a clause is inserted in the Contract, particularly for off-plan contracts. In the absence of such a clause you will not be able to sell, before completion of your purchase.
Property Purchase Costs
Property buyers in Morocco should expect to pay around 7% of the property price. This includes:
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legal fees – to complete the transaction formally c.1%
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notary costs c. 0.5%. Notary fees are negotiable, dependent upon the cost of the property in each case. However, there is a minimum of 5,000 dhm.
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government taxes c. 2.5%
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property registration costs – to register the title deeds at the land registry
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realtor/agent fees
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land charge and stamp duty
VAT is currently 2.5% relating to conveyancing in Morocco. In the case of old houses or land, VAT is charged only on the notary and government registration fees, not on the property or land itself. VAT at 20% is, however, payable on newly built property, renovation work and off-plan purchases
Land sales are subject to a charge of 1% to cover the notaries' fees
Maintenance/ Service Charges - those purchasing in co-ownership will be liable to pay monthly service charge bills.
Opening a Moroccan bank account
As Dirhams are a restricted currency they cannot leave the country. It is therefore necessary for purchasers of property in Morocco to open a convertible bank account in Morocco. This allows foreigners to put in and take out foreign currency.
Mortgages
Financing a Moroccan property investment is an important decision and could take the form of cash or, as most investors prefer, a mortgage or equity-release scheme. Morocco offers mortgages for non-residents and all banking products are becoming widely available. Mortgages are available on the following terms: -
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The maximum mortgage is 70 percent of the purchase price or valuation.
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The purchase is usually in Moroccan Dirhams
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The usual maximum period is 20 (fixed rate) or 25 (variable) years, but banks do differ. The term cannot extend beyond normal retirement age and in some cases to the age of 70.
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Proof of income is required.
We will gladly point you in the right direction of Moroccan financial institutions that could finance your investment. We have access to mortgages from a range of Moroccan and offshore banks, while the final choice depends solely on your circumstances.
Although mortgages are available in Morocco, the most an overseas buyer can currently borrow is normally 60% of the valuation price.
The purchase can be paid in either Euros, US Dollars or Sterling, and needs to be transferred from a foreign account into a Moroccan bank, where the transaction will be processed into Dirhams.
Mortgages are generally more expensive than British equivalents. It is a good idea to shop around the British banks, as some will also lend for Moroccan property.
Note: 6 months mortgage instalments may be required to be held in the bank account.
Moroccan banks will normally lend you up to 35% to 40% of your net salary without prior credit checks or confirmation of existing financial obligations.
To help the mortgage application process move more swiftly it is advisable to have the following documents to hand.
Employees will need:
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Letter/certificate to prove employment
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Last three months pay slips
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Possibly past bank statements
Business owners will need:
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Company statutes and bylaws proving who owns the company
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Certificate of incorporation
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Last two years' company accounts
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Latest balance sheet
