Overseas Property Market booming in Morocco

[Myasilah]

In terms of property hotspot market, Morocco is reaching the booming maturity. We know all as investors, buyers or real estate developers that everyone was looking for to grab a property in Dubai or Spain as a fashion. Now Morocco is attracting most of the professional investors who did many research about where the business is growing safely with low risk and a huge profit including many advantages like the quality of living, the warm and friendly people, the nicefood, the fantastic weather and most of that the low tax and all the removed obstacles for property and tourism investment, thanks o king Mohamed VI. Many projects are opened to Moroccan like foreign investors: in reality there are no foreign investors in Morocco like we feel in other countries. Everybody is the same. If you are smart investor you can make huge return by investing in Morocco in real estate, in tourism and land development.You need just to be in the right hands with professionals who knows Moroccan market and they know the international investor expectations. Morocco finally became an international mature real estate market. Marrakech for example bechow to deal with any situation. Morocco ia a very hip tourist destination, attracting visitors who become investors in a very short time from over the world. I met many overseas investors who want to invest in real estate which is booming and reaching the maturity in this very vibrant country.
There is a lot of development taking place all over Morocco, particularly along the seaside and in the Atlas mountains,offering greater potential for investment growth.
I agree, each country has different ownership rules which you have to consider before buying, but a reputable real estate consultant advise you. Also with all this cold and rainy weather a holiday in the sunny Morocco sounds very tempting. I just came back few weeks ago from Morocco and i already booked a flight to Marrakech because it's very cold here in Birmingham, England and why not the ticket is cheaper than a trip to London on the train. For any free information or advice feel free to call me at +447951478813 (UK)

 

[andyk2]

I beg to differ

VAT in Morocco has just gone up to 20% on new properties. That means (assuming your estate agent is only charging 5% commission on your resale and your lawyer is not screwing you for the legals) that your property has to appreciate in value by 28% before an investor sees a penny of profit.

There are plenty of markets in the Caribbean which offer better standards of resort than Morocco and, because of the tax advantages, are better suited to investment. (I pick the Caribbean solely because of the weak dollar - you could add Egypt, parts of Turkey, parts of Asia, and even Spain to the list of locations that will give a better capital return and better holiday experience than Morocco.

If you like Morocco, go there, but I don´t see a "huge return by investing in Morocco" (unless you did it over 6 months ago and have a guarantee on the gross price you are going to pay) - and looking at the market lately, would be very specific on what and where I chose to invest.

 

[Lee Filkins]

subject

andyk2:
I agree with you fully. At present and as expected Spain is cheaper than Morocco with all the benefits of EU, lack of Exchange control, Proper democracy and law and decisions are not made by the King or at a whim.

Not to mention VAT on mortgage interest rates that the Moroccans are charging unlike anywhere in the world.

" Many projects are opened to Moroccan like foreign investors "
This may be the case however its the non Moroccans that are being fleeced by establishing or setting or raising levels and taxing, as these levels cannot be reached by an average Moroccan

 

[Salameer]

VAT in Morocco has just gone up to 20% on new properties. That means (assuming your estate agent is only charging 5% commission on your resale and your lawyer is not screwing you for the legals) that your property has to appreciate in value by 28% before an investor sees a penny of profit.

There are plenty of markets in the Caribbean which offer better standards of resort than Morocco and, because of the tax advantages, are better suited to investment. (I pick the Caribbean solely because of the weak dollar - you could add Egypt, parts of Turkey, parts of Asia, and even Spain to the list of locations that will give a better capital return and better holiday experience than Morocco.

If you like Morocco, go there, but I don´t see a "huge return by investing in Morocco" (unless you did it over 6 months ago and have a guarantee on the gross price you are going to pay) - and looking at the market lately, would be very specific on what and where I chose to invest.

Well done Sir!
After my visit to Marrakech last year, I started looking at Morocco as an investment. I couldn't believe the amount of charges/taxes imposed. Forget it, I thought and haven't looked back.
Lovely city though!

 

[Investy]

Caribean I have been looking at but the rent yields are no good (guarantees are neither here nor there as they are not long term). The season is very er seasonal what with the wet season.

Andy, are you the chap that thoroughly recommended and solf Saidia Morocco in 2006?

Morocco is all about high year round yields.

 

[andyk2]

Not guilty your honour

Caribean I have been looking at but the rent yields are no good (guarantees are neither here nor there as they are not long term). The season is very er seasonal what with the wet season.

Andy, are you the chap that thoroughly recommended and solf Saidia Morocco in 2006?

Morocco is all about high year round yields.

Different Andy, although if you did invest in Morocco in 2006 I am sure you would be very happy.

Caribbean? Punta Perla offers up to 10.70% for 10 years guarteed (although the entry level is high) and I know of some non-guaranteed product in Belize that should turn over 10% gross (3% tax on rental income).

Even though the £ is not as strong as it was a couple of months ago, Belize, Peru and Uruguay are still markets worth looking into.

Andy (not Welland)

 

[Myasilah]

VAT in Morocco has just gone up to 20% on new properties. That means (assuming your estate agent is only charging 5% commission on your resale and your lawyer is not screwing you for the legals) that your property has to appreciate in value by 28% before an investor sees a penny of profit.

There are plenty of markets in the Caribbean which offer better standards of resort than Morocco and, because of the tax advantages, are better suited to investment. (I pick the Caribbean solely because of the weak dollar - you could add Egypt, parts of Turkey, parts of Asia, and even Spain to the list of locations that will give a better capital return and better holiday experience than Morocco.

If you like Morocco, go there, but I don´t see a "huge return by investing in Morocco" (unless you did it over 6 months ago and have a guarantee on the gross price you are going to pay) - and looking at the market lately, would be very specific on what and where I chose to invest.

As an investor an boker dealing with Property in Morocco I am very positive in investing in Morocco. I am not negative about investing in other countries may be because you know how to invest in Turkey...and other countries.
To invest in a country you need to know the countrry, the market and to falow the updated News about any investment. Recently Moroccan Government removed all the obstacles to empower the overseas investors in Morocco in real estate, in tourism and other industries, thanks to the king Mohamed VI who is falowing the investment and the market competition closely and removing all the obstacles for investors. I know many investors who invested in Dubai, in Turkey...who are saying the same things as you said about Morocco. To have success in investing in any country ou need to work with local people and investors i had the experience in Spain 17 years ago and i was saying the same thing because i was working foreign investors from Spain. I Learened from that lots.
I am not promoing Morocco property because the country doesn't need that. I can tell you that buyers and investors are well informed before to invest in any overseas real estate because they can find all the information they need in the internet especially in a great forum like totally property and other forums. I can tell you that the buyers now do more research and get more information and not like before 20 years ago. We know that there is a big competition but we are happy because competition is good for the business.

 

[andyk2]

The maths does not appeal to an investor

Myasilah,

I do not disagree with you that Morocco is a beautiful and attractive country, What I disagree about is that the government are doing "all they can" to attract investors. VAT is 20% on new properties. VAT is now charged on rental income and mortgage interest - this does not feel like "removing the obstacles". This is not King Mihammed opening the doors and welcoming the international investor - this is the Moroccan government screwing any unwitting investor!

BTW - Dubai has no VAT, no Income Tax and no CGT. It is hardly a comparison!

Anybody who is a property broker in Moroccan properties (and I am one also) may choose to ignore these additional costs and fees that clients have to pay on their investment, but these clients will never come back to you again. If you want to make money in the long term, don´t pretend that Morocco is a top investment - tell the truth.

Your clients will appreciate it!

Andy

 

[redangel7861]

I was aware the TVA had increased from 14% to 20%, but was not aware of VAT being applied to rental income and interest payments on mortgages. I was led to believe that all rental income would be tax free for the first five years.

How do the government propose applying the VAT to interest payments??????

 

[Lee Filkins]

subject

Redangel7861:
I don't know how old you are. But when the current labour party came into power they promised that they will not increase income Tax. Sure they did not but everything has been taxed as you may have noticed.

Similarly, the Moroccan Govt said no Taxes on rental for 5 years. What the small print said no rental on direct Taxes. It did not say indirect Taxes. ( A souk mentality I am afraid)

VAT on interest is applied at 10%. So if the Bank is charging 5% you add another 10% on the 5%, so it becomes 5.50%. the 5% goes to the Bank and the 0.50 % to the VAT man or dare I say to the King.

It will not be a one off payment it will be applied to the capital for the life of the mortgage.

 

[redangel7861]

Camel.

Thank you for the reply, so in summary 10% will be applied to the interest rate charged by the bank.

Are you aware of the VAT that will be charged to rental income (will it be the set 20%)???

Thanks
Red

 

[Lee Filkins]

subject

" so in summary 10% will be applied to the interest rate charged by the bank.

Yes, that is what it is.

Are you aware of the VAT that will be charged to rental income (will it be the set 20%)???

Before latest changes the VAT applied on rentals was 10%. Not only the rent will be VATABLE. you will also have to pay VAT on Agents fee, cleaning etc.

The problem is that people do not do enough research, one has to not only look at the developer, planning papers, location, distance from the Airport motorway, the taxes, bank opening/closing cost. I can go on. Research is like a piece of string.

 

[redangel7861]

Camel.

Point taken - BB's like these are always a good source of information. I was aware that VAT would be charged on all other services and have discounted for that. Even with the increase in VAT of 6% I still believe there is a substancial profit to be made in Morocco in the following 5-7 years and am proceeding with all my investments.

Again, thanks for the info you have provided.

Red

 

[Lee Filkins]

subject

I am not sure about your projection. I feel Morocco is for people who already hold a portfolio with substantial equity.

Its, OK for diversification in terms of say, having a high risk property/Country in ones portfolio or look at the % game of say, having 10% or 20% as high, medium or low risk of your asset value.

 

[Naoufal]

Unbelieveable that you are discussing the fact wether Tangiers is a safe or profitable investment for investors. I am an agent myself and have good developers in Tangiers who are friends/relatives, I have clients bringing me clients from all over the world who want to invest, but don't have the right information because the best developers are the local developers because they know the market, they offer relative cheaper luxury appartments/ villa's than other developers. And not to forget they offer good legal guarantees signed on paper.
And about taxes, I think you must do some better research please do so. I quote: Morocco property is currently one of the world's leading emerging markets for investment abroad.
Said by a well known investcorporation