In brief: The real estate capital gain in Morocco is the profit realised on the sale of a property. It is subject to IR at a rate of 20% of the net profit, with a minimum contribution of 3% of the sale price (Art. 73-II-F-6° and Art. 144-II of the Tax Code). The calculation takes into account the revaluation of the acquisition price using annual coefficients. The principal residence exemption is available subject to conditions: effective occupation for a minimum of 6 years and a sale price not exceeding MAD 4,000,000. The return must be filed within 60 days of the sale.
Definition of real estate capital gains — Art. 61-II
Article 61-II of the Tax Code defines the real estate capital gain as the profit realised on the occasion of:
- The sale of immovable property (built or unbuilt) located in Morocco
- The sale of real property rights: usufruct, bare ownership, surface rights, long lease (emphyteusis)
- The sale of shares or interests in real estate-predominant companies (SPI), i.e. companies whose assets consist of more than 75% real property
- Expropriation for public utility: the expropriation compensation is treated as the sale price
- Exchange of real property, any cash adjustment (soulte) being subject to IR
The real estate capital gain is distinct from rental income, which concerns rents received. Here, the taxation applies to the capital gain on sale, i.e. the enrichment realised between the acquisition and the resale of the property.
Calculation of the net profit — Art. 65
The taxable real estate capital gain is determined according to the following formula:
Net profit = Sale price − (Revalued acquisition price + Acquisition costs + Investment expenditure)
Sale price
The sale price used is the price declared in the deed of sale. However, the tax authorities may adjust this price if they consider it to be lower than the market value of the property at the date of sale, based on comparables or an expert valuation.
Revalued acquisition price
The acquisition price is the price actually paid, as shown in the deed of purchase, increased by the revaluation coefficients published annually by order of the Minister of Finance.
These revaluation coefficients neutralise the effect of inflation between the date of acquisition and the date of sale. They are indexed to changes in the consumer price index and are updated each year. The longer the holding period, the higher the coefficient, thereby reducing the taxable profit.
Example of coefficients (for illustrative purposes):
| Year of acquisition | Approximate coefficient |
|---|---|
| 2000 | 1.60 |
| 2005 | 1.45 |
| 2010 | 1.30 |
| 2015 | 1.18 |
| 2020 | 1.08 |
| 2024 | 1.02 |
The exact coefficients are published by ministerial order and vary each year.
Flat-rate acquisition costs
In the absence of proof of actual costs, acquisition costs are assessed at a flat rate of 15% of the acquisition price. These costs are deemed to cover notary fees, registration duties, land conservation fees and intermediary commissions.
If the taxpayer has evidence of actual costs exceeding 15%, they may deduct them at their actual amount.
Investment expenditure
Deductible investment expenditure includes construction, reconstruction, extension, renovation or improvement works, duly supported by invoices. Routine maintenance works are not deductible under this heading.
Tax rate — Art. 73-II-F-6°
The net real estate capital gain is subject to IR at the rate of 20%.
Minimum contribution — Art. 144-II
Regardless of the amount of the net profit, a minimum contribution of 3% of the sale price is due. In other words:
- If 20% of the net profit > 3% of the sale price → the taxpayer pays 20% of the net profit
- If 20% of the net profit < 3% of the sale price → the taxpayer pays 3% of the sale price
This minimum contribution guarantees tax revenue even when the net profit is low or when the revaluation of the acquisition price absorbs a large part of the capital gain.
Exemptions — Art. 63
The Tax Code provides for several cases of total or partial exemption from real estate capital gains tax:
Principal residence
The sale of the principal residence is exempt subject to the following cumulative conditions:
- The property was occupied as a principal residence for a minimum of 6 consecutive years at the date of sale
- The sale price does not exceed MAD 4,000,000
If the price exceeds MAD 4,000,000, only the portion of the profit corresponding to MAD 4,000,000 is exempt; the surplus is taxable under ordinary rules.
Sales between ascendants, descendants and spouses
Profits from sales between the following are exempt:
- Ascendants and descendants (parents-children, grandparents-grandchildren)
- Spouses
This exemption facilitates intra-family wealth transfers without tax liability.
Other cases of exemption
- Sale of a property where the sale price does not exceed MAD 140,000 per transaction
- Sale of a property acquired by inheritance, subject to certain conditions relating to the holding period by the deceased
- First sale of social or low-value housing under certain conditions
Worked example
A taxpayer sells an apartment in 2026 that was acquired in 2010:
| Item | Amount |
|---|---|
| Sale price | MAD 1,800,000 |
| Acquisition price (2010) | MAD 900,000 |
| Revaluation coefficient (2010 → 2026) | 1.30 |
| Revalued acquisition price | 900,000 x 1.30 = MAD 1,170,000 |
| Acquisition costs (15%) | 900,000 x 15% = MAD 135,000 |
| Justified investment expenditure | MAD 80,000 |
Net profit calculation:
Net profit = 1,800,000 − (1,170,000 + 135,000 + 80,000) = MAD 415,000
IR calculation:
- IR on net profit: 415,000 x 20% = MAD 83,000
- Minimum contribution: 1,800,000 x 3% = MAD 54,000
Since the IR (83,000) > MC (54,000), the taxpayer pays MAD 83,000.
If the net profit had been lower (e.g. MAD 200,000 → IR = MAD 40,000), the minimum contribution of MAD 54,000 would have applied.
Filing and payment — Art. 83
The taxpayer must:
- File a real estate capital gains return (form ADP020) within 60 days of the date of sale
- Attach supporting documents: deed of sale, deed of acquisition, invoices for works
- Pay the corresponding tax to the tax collector at the location of the property
- In the case of a notarised sale, the notary is required to carry out the withholding and payment of the tax on behalf of the seller
Failure to meet the 60-day deadline exposes the taxpayer to surcharges and penalties for late payment (15% surcharge + 0.50% late interest per month).
Reference texts: General Tax Code 2026 — Art. 61-II, Art. 63, Art. 65, Art. 73-II-F-6°, Art. 83, Art. 144-II — Circular Note No. 717
Frequently asked questions
Am I exempt if I sell my principal residence after 5 years?
No. The principal residence exemption requires effective and continuous occupation for a minimum of 6 years at the date of sale, and a sale price not exceeding MAD 4,000,000. If you sell after only 5 years, the real estate capital gain is fully taxable at the rate of 20%, with the minimum contribution of 3% applying.
How are the revaluation coefficients determined?
The revaluation coefficients are set each year by order of the Minister of Finance, based on changes in the consumer price index. They are published in the Official Gazette. The applicable coefficient is the one corresponding to the year of acquisition of the property. The older the property, the higher the coefficient, which reduces the taxable profit.
What happens in the case of a sale at a loss?
If the sale price is lower than the total cost (revalued acquisition price + costs + investment expenditure), there is no real estate capital gain. However, the minimum contribution of 3% of the sale price remains due. No carryforward of real estate losses is provided for under the Tax Code, unlike loss carryforwards for professional income.
Is the sale of SCI shares subject to real estate capital gains tax?
Yes, when the SCI (civil real estate company) is a real estate-predominant company — i.e. one whose assets consist of more than 75% of real property — the sale of shares is treated as a property sale and subject to IR on real estate capital gains under the same conditions (20% of net profit, 3% MC on sale price).
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Preparing a property sale and want to optimise your tax position? Contact our tax law experts for an accurate calculation of your real estate capital gain and identification of applicable exemptions.
