Frequently Asked Questions
1. Will I own the freehold on the property?
2. How much will the annual management charge be?
3. Can I select the interior design packages myself?
4. When will the Bab Adrar estate be open for visitors?
5. What is the annual tax liability likely to be?
1. Will I own the freehold on the property?
Yes you will own the title deed to the property. As Bab Adrar is built on former agricultural land, it is covered by a VNA certificate. This means that in order to protect the integrity of the countryside, the local authority will not permit building sites to remain unfinished - so they impose a law that states that until all the properties on the development are completed, the final title deed remains in the name of the developer - the developer must complete the building work with a prescribed timeframe. Purchasers are protected by a system of guarantees.
2. How much will the annual management charge be?
For the first two years, the Management Company will apply a fixed annual charge, which differs for each house, being based on the property size, and which will be given in full detail to each owner.
Subsequently, the annual management charge will be calculated from actual costs relating to each property, plus a proportion of communal site costs. Each property owner will sign a co-ownership agreement, which states clearly each owner's obligations and which contains details of how the site will be run.
3. Can I select the interior design packages myself?
You can buy a house at Bab Adrar either furnished or unfurnished.
Furnished
Our interior designers have created a vision for each home in its own individual style. The furnished property price includes a high standard of décor, fixtures and furnishings. You would of course be able to add to or alter the interior design once a reservation agreement has been signed. Amendments and alterations may be subject to an additional charge
Unfurnished
You may choose to work independently with our designers or create your own individual specification according to your personal preferences and budget.
Whilst you are of course at complete liberty to use your own interior designer, if you will be choosing to enter into a managed rental programme at Bab Adrar, then the standard of décor is vital to preserve the character and individuality of the Bab Adrar estate. To ensure that we are able to maintain consistently high standards of replacement, refurbishment and maintenance, it is essential that our team of interior designers take full responsibility for the design packages of your residence. You will, of course, be able to work with the designers to express your preferences and budget.
4. When will the Bab Adrar estate be open for visitors?
Three Phase 1 properties are complete and in posession of their habitation certifcates. Phase 2 is being built off-plan and is on schedule for completion by the end of 2008. Phase 3 is about to begin. It is programmed to be completed by the end of 2009. However, this is inevitably subject to local circumstances and, although every effort will be made to complete the project by the target date, we cannot offer any guaranteed timescale.
5. What is the annual tax liability likely to be?
The Morocco tax system is modelled on the French system and can be quite complex. All purchasers are strongly advised to get independent tax advice on their Bab Adrar purchase and to employ a local reliable accountant to deal with their tax claims. The UK and Morocco subscribe to a double tax agreement.
The following information gives a very basic outline of the Morocco tax implications for UK purchasers:
Buy to Let
Personal Income Tax on Rental Income (IGR) for a non-tax resident
Anyone generating an income in Morocco, whether they are tax resident or not, will have to complete a tax return declaring their income. Buying a property and letting it out incurs tax liability on the income. In Morocco, the first 20,000dhs are tax exempt and the remainder is taxed at a sliding scale from 13% (with reduction of 2,600dhs) for income between 20,000 and 24,000dhs, rising to 44% for income surpassing 60,000dhs per year.
Local Property Tax (Taxe Urbaine- TU) and Taze d'édilité (TE) (Personal holiday home option)
A Property may incur this annual tax, but for the first five years, private purchasers of a newly constructed property have full exemption (Property agencies and companies are not exempt). There is a 75% discount if the home is your permanent residence.
At the moment, no urban tax is payable on a rural residence such as Bab Adrar D'Atlas as this is considered outside of the public services zone.
Property Rental Tax (Taxe Urbaine) (Investment only)
Investors are liable for 13.50% tax on the rental value of the property if they do not live at the property at all.
Refuse Collection Tax (Fiscalite des collectivites locales)
At the moment, there is a 5 year exoneration from the garbage collection tax. In subsequent years, tax is calculated at 10% of the property's annual rental value.
Buy and Resell
Capital Gains Tax (Taxe sur les Profits Immobiliers - TPI)
20% Capital gains tax is payable on the profit from resell, with a minimum payment of 3% of the final sale price. TPI is based on the sale price less the purchase price. In this instance, the purchase price is deemed to include the following:
Cost of borrowing, Registration and legal costs, Notary fees and taxes, Repairs and maintenance costs,
Brokerage fees, Inflation (based on a current government figures)
Sellers are exempt from Capital Gains Tax if the property is sold after it has been owned for more than ten years.
When the property is owned for more than 5 years but less than 10 years, the TPI tax will be 10% of any capital gain over 1 million Dirhams.
Inheritance Tax
No inheritance tax is payable for family members. Expert advice should always be obtained prior to implementing any inheritance tax planning strategies.
Owners are strongly advised to make a Moroccan will.
UK - Morocco Tax Treaty
There is a double tax treaty between the UK and Morocco that ensures purchasers do not suffer Income or Capital Gains tax in both countries.
Corporate Tax
If you intend to purchase a number of Moroccan properties it may well be worth considering establishing a Moroccan Private Limited Company -The private limited company (SARL). Detailed legal advice is essential in this instance.
