Local Lawyer Essential for Property Investment Success in Morocco

Despite the amount of investment being ploughed into the development of Morocco as an exciting tourism and business hub with an active property market, Morocco is still an emerging market and foreign buyers would do well to remember this before rushing in and making wild assumptions about the property purchase and ownership processes and the viability of their particular property investment approach!

There are a number of quirks in the Moroccan property purchase process for example that mean a local lawyer is essential for property investment success in Morocco - and in this article we detail exactly how a lawyer can help and specifically how you should use a lawyer’s services to get the most out of your Moroccan real estate investment.

First things first, there are two distinctively different types of property purchase process depending on whether the real estate or land for sale is registered or non-registered in the Land Registry.  The latter type of real estate is known locally as ‘melk’ and is governed by Muslim law and requires a lawyer to search the legality of the property and the vendor’s rights to sell it in depth before a prospective buyer even puts down a holding deposit. 

Real estate that is registered has a title deed or ‘titre foncier’ and your local Moroccan lawyer has to examine the title deed and its history to ensure the property in Morocco for sale has not been altered without the title deed having been updated and that there are no mortgages, liens, debts or other claims against the real estate being offered for sale.

Often a property investor is encouraged to open a bank account locally in Morocco to make the buying process smoother – this is a process that can be eased with a local lawyer’s say so if you open an account at his local bank!  A lawyer can also advise a prospective investor about whether they would be better off from a taxation, security, flexibility and regulation perspective, buying their property assets in their name, through a local company or via an offshore structure, and a decent law firm can assist with the establishment of the latter two entities if either are deemed most appropriate for a given client.

Another way local lawyers can be essential for property investment success in Morocco is when it comes to advising on the viability of an investment approach.  For example, if you’re buying to let Moroccan property you will have to pay tax on the income you earn.  However, during the first three years of rental, provided the property is brand new when you purchase it, you can avoid this income tax legitimately and a lawyer can show you how.  In addition, when you come to resell a lawyer can assist you with understanding the many exemptions and exceptions that you can utilize to legitimately reduce your capital gains tax liability.

Finally, a local lawyer can explain not only the ins and outs of the buying and owning processes, they can take on everything associated with the buying process, they can often help with arranging insurances, they can introduce you to other useful professionals such as a local accountant to help with annual tax returns or a local bank manager to help with mortgage applications or bank account establishment and they can keep you fully abreast of any proposed and pending changes to the legal process affecting you, your assets and your property investment approach.

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