Morocco property market growth from Brits

[Myasilah]

Morocco has seen a market growth in property purchase enquiries from Brits, from an average of 36 per month in 2006 to 60 per month in 2007 and more than 100 per month in 2008. Low cost airlines including Ryanair EasyJet and royal air Maroc have helped to open more business opportunity investments in Morocco, making the country increasingly accessible from the UK, the whole Europe and the north America, therefore, attracting British, Irish, French, Belgian, Dutch, American, Canadian and Middle East investors. In recognition of its increasing importance on the tourism and investment map, the Moroccan government is currently spending over $20 billion developing the country’s supporting infrastructure. New roads, rail links like TGV train and a massive airport upgrade are all underway.

When considering a purchase on a popular resort complex such as in Tanger Med, the development's situation within the resort is as important as the location of the resort itself: The Views is enviably positioned just across from the new free zone international port of Tanger Med which is going to be open in July 2008, Resorts with hotels, villas, apartments and shoping centres with Andalusian-style gardens and the 5 stars hotels, making it one of the most attractive and desirable low-density plots on the entire resorts. Mediterranean beaches and the proximity to Marina Tangier and Tetouan, along with a full range of on-site resort facilities all make The Views ideal for holiday properties and international business investments.
All discerning property investors realize the importance of taking advantage of the most lucrative real estate opportunities as soon as they arise, before they become common knowledge. The International Property Investment Network Myasilah operated by Luxury Living In Morocco - Property Investment helps all types of investors in their quest to access up-to-the minute information on the very latest investment opportunities in the worldwide property market today especially in Morocco.

 

[lurcher21]

Thinking of buying property in Morocco?

It's all very well promoting these so called fantastic investment opportunities in Morocco but I think it is high time prospective purchasers were given the full story including the pitfalls. Having just sold a villa we now know all the drawbacks and can advise anyone on exactly what happens when selling and more importantly, when trying to get the funds transferred out of the country again!

 

[manor park]

lurcher21

If you get time to post this, I am sure that myself and lots of other viewers of this site would be very interested to hear how you got on and the pitfalls you encountered.

MP

 

[Investy]

Lurcher, one reason we bought the lejardindefleur Saidia product was that they set up pre arranged systems to ensure money comming in from me was tracked and left a clear audit trail such that repatriation is supposed to be straight forward. They warned us up front that without such a system investoprs could struggle.

Yet another reason I steered clear of small one off developments

 

[lurcher21]

Yeah, sorry, been very busy all day today so will give you all the details this evening.

 

[Lee Filkins]

subject

Lurcher21: I and above wait for your postings.

 

[Lee Filkins]

subject

Investy. Whilst i agree with your views. In any third world country what should happen & what happens are two different things. I however cant see that Morocco can get to where, they want to reach without resolving some outdated business practices.

 

[lurcher21]

Regarding repatriation of funds first. We bought a plot of land in 1999 and built a villa. I realise that this is a complicated way to go about things in a foreign land - but at the time we had been looking to buy over there for some time and the opportunity came up to buy from a large, very reputable company (CGI) All the funds used for the purchase and the subsequent construction were transferred bank to bank from the UK, and fully traceable. We are both British citizens, although one of us is of Moroccan origin, but not born in Morocco.
We are not resident in Morocco, and have never really had much benefit from having the villa over there, it was really a bit of a waste (due mainly to personal circumstances) so last year we decided to sell it.

Although paying for a proportion of a property 'on the black' is widespread in Morocco, we put the villa in the hands of a local Notaire (solicitor),who agreed an asking price with us, and after a few months telephoned us with an offer, which we accepted. This was last December. We went to Morocco mid-March to finalise the sale. We declared every penny of the sale price. The purchasers were buying with a large bank loan and the Notaire said that the whole amount had to be declared in that case. We then found out that all the running around to pay the various charges and taxes due on the sale would have to be done by ourselves - and the Notaire would with-hold a large chunk of the funds until we provided all the 'Quittus' to prove we had paid all the taxes due (TPI, TVA, Tax Urbaine etc) This was fair enough - we knew we would have taxes to pay. We spent 2 months running around from a to b to deal with the calculation and payment of the taxes due. We paid the whole of the TPI (capital gains tax equivalent) due on the sale price, only to find to our horror that the Tax office decided that the house was worth 550000 dirhams MORE than we had sold it for, and presented us with a bill for a further 140000 dirhams on top of the 85000 dirhams TPI we had already paid! PLUS if we didn't pay up within a month there would be a majoration added on top every month until it was paid. It seems that they know many sellers do not declare the whole amount, so they penalise everyone regardless of whether they are honest or not! They are holding us to ransom, as until this amount is paid, the Notaire will not release the remainder of the purchase funds into our accounts.
As for the transfer of funds out of the country when you sell - well, unless you want to do it on the black market and carry thousands and thousands of euros in cash in a suitcase, you have to go through the `Office de Change'. The transfer can be done just the once. As one of us is a foreigner resident abroad, one half of the purchase funds has to go into a 'Compte en Dirhams convertibles' - and can only be transferred out of Morocco at 25% per year over 4 years. The other 50% in theory can be transferred as the other one of us is an MRE (Moroccan resident a l'Etranger) We have been getting the transfer dossier together for another trip back to Morocco later in the year, when hopefully the taxes will have been sorted out and paid and we have the necessary 'Quittus' to allow us to have our OWN money from the sale! In any event - if we end up with the original amount we invested almost 10 years ago, after the taxman has finished with us, we will consider ourseves lucky.
Just another point about Tamesna (near Rabat) I have seen apartments advertised there off-plan by several UK websites. We went to look at what seemed like a very attractive development, until, whilst in Morocco, we read a newspaper article stating that the Government has agreed to build a large number of 'social housing' flats on that development - where they re-house families moved out from the shanty towns in the centre of the city. When we pointed out the article to one of the UK companies selling on that development they didn't want to know, even when we offered to scan and email them the newspaper article.
We have returned from Morocco traumatised and now wish only to warn prospective buyers of what to be aware of - as neither the selling agents nor the Notaires handling the purchase seem to be prepared to point out the pros and cons honestly. It takes 2 minutes to transfer your money to Morocco but getting it back out again is an entirely different kettle of fish. Imagine, if you are a retired married couple (and we won't yet go into the ins and outs of the succession laws over there!!) and one of you sadly dies, the hell that the remaining partner is going to have to deal with alone in that country should be more than enough to make anyone seriously reconsider their decision to buy.

 

[Investy]

Thanks Lurcher.

I imagine those of us buying on Saidia will benefit from onsite legal and Tax assistance which is a bonus.

 

[Lee Filkins]

subject

Thanks Lurcher: Do you think as Morocco evolves, this rather in efficient/incompetent system will have moved on.

 

[The Soup Dragon]

Thanks for sharing that Lurcher21.

Please name the development that will have the social housing and name and shame the Estate Agents that didn’t want to know.

 

[lurcher21]

Thanks Lurcher: Do you think as Morocco evolves, this rather in efficient/incompetent system will have moved on.

They are certainly not inefficient or incompetent when it comes to stealing your money and charging you taxes on funds you have never had. We went with the intention of selling the villa and buying a smaller apartment - but we have been completely discouraged by what has happened - and in any case by the time they have finished taking our money I don't think we will be left with sufficient funds to buy an apartment! We will keep you informed on the outcome of the funds transfer matter when we go back in the Autumn.
We actually got advice from the British Consulate whilst over there - and were put in contact with the lawyer who looks after their interests in Morocco. He advised us to try to negotiate a reduction in the TPI but said there was nothing more we could do. The tax office will increase the amount of TPI due MONTHLY, they say, because of the soaring property prices, as each month the house is worth more. It is so unjust. Even the purchasers of our villa now face a much increased tax liability due to the higher valuation.
If anything, I reckon things are getting worse over there (with regard to bureaucracy, corruption, dishonesty etc) not better. The bubble has to burst. Who knows, maybe in the end we will have had a lucky escape by selling when we did.

 

[Lee Filkins]

subject

Lurcher
I reckon things are getting worse over there (with regard to bureaucracy, corruption, dishonesty etc)

With money in the system the above comes. Morocco has to ensure that matters dealt in this manner has to be a thing of the past.

By the way did you try and resolve the matter with the Tax man in the Moroccan manner ??????

 

[Investy]

Ive lost count of the number of TV reports that cover bad property outomces in France and Spain. Morocco will be no different, just a case of taking as much care as possible when investing.

It's difficult to get a handle on your story Lurcher. In my job I meet people all the time that tell me the UK has gone potty as they have had some debarcle with the revenue here where they consider themselves a totaly innocent party caught in the revenues jaws.

Good luck

 

[lurcher21]

Lurcher
I reckon things are getting worse over there (with regard to bureaucracy, corruption, dishonesty etc)

With money in the system the above comes. Morocco has to ensure that matters dealt in this manner has to be a thing of the past.

By the way did you try and resolve the matter with the Tax man in the Moroccan manner ??????

Actually we will be able to outline it all in more detail once the whole matter is sorted out and we find out what, if any, funds they will allow us to have!

Regarding the capital gains tax (TPI) - Correct me if I am wrong, but I don't know of any European tax system which taxes ALL home sellers - even on the sale of their principal residence. The UK has a very favourable capital gains tax policy, even more favourable than in France, as there are allowances which can be offset against the tax due. Nor do I know of any country which charges tax on non-existent profits! They are virtually saying ''You are dishonest. You are lying about the price you sold your property for so we will charge you on the profits we say you have made.''

 

[manor park]

lurcher21

Thank you for taking the time to outline the problems you have had. It may not be of any comfort to you but information like that on emerging markets is really useful to those of us that are, or thinking of investing in the area.

I am hoping that my investment on a large development will have some of these pitfalls covered already but we shall wait and see.

I hope you get as much cash out of your property as you can and thanks again for the info.

MP

 

[lurcher21]

Thanks for sharing that Lurcher21.

Please name the development that will have the social housing and name and shame the Estate Agents that didn’t want to know.

It's the new development/town of Tamesna, near Temara, Rabat. The British agent contacted me through the RightMove website in the UK. I may still have her details in my inbox - I will look later. I actually complained to the organisers of RightMove too - as they were advertising apartments near Tangiers at ridicuously low prices, then when I asked for details, I was contacted by several agents - all of whom quoted vastly higher prices than on Rightmove. The response from RightMove was that they would investigate. Still haven't heard from them again and don't suppose I will considering it's the advertisers who pay them!

 

[lurcher21]

Development at Saidia.

http://www.youtube.com/v/nIk-MG0sqic&hl=en

The above is an interesting report on buying properties in Saidia.