Article 154 bis mandates that legal entities and individuals, whether subject to the real net income regime or the simplified net income regime, must declare real estate income paid to individuals.
The declaration must include the owner’s full name, the location and description of the rented property, its registration number in the communal services register, total annual rental amounts, and corresponding withheld tax amounts.
Recent audits conducted by the General Tax Administration have revealed that short-term rental investments, whether directly or through digital platforms, will no longer escape taxation.
Authorities will conduct periodic tax reviews, urging non-compliant taxpayers to rectify their situation voluntarily and settle outstanding tax obligations. With rental profits surging, particularly in summer, and investment in the sector rising, the government, under the 2023 Finance Law, aims to boost tax compliance and fairness by enforcing tax declarations as a first step.
Real estate rentals via specialized platforms such as Airbnb and Booking fall under Law 80.14, which regulates tourism establishments and other forms of tourist accommodation.
This law requires hosts to obtain an operating license valid for five years and mandates income tax, a 10% value-added tax (VAT), a lodging tax, and a tourism promotion tax. Hosts must declare their income and comply with these regulations to avoid fines. Consulting a tax accountant is recommended to ensure full compliance.
According to tax consultant Nabil Rifai, rental income from digital platforms is subject to multiple tax obligations. Hosts must declare earnings under the income tax category for rental income, with taxes calculated based on annual income.
Additionally, a 10% VAT applies to tourist accommodation services, meaning hosts must incorporate this tax into rental prices and remit it to tax authorities. Moreover, the lodging and tourism promotion taxes, collected from tenants, vary by city and property type.
Rifai warned that many hosts fail to declare their earnings, either due to a lack of awareness or to evade taxes, exposing them to fines and legal consequences. He advised property owners to ensure proper legal and tax compliance, keep clear financial records, and consult tax professionals to avoid future disputes and help regulate the sector.
The implementation of new tax regulations on rental income, effective since January, has sparked concerns among property owners regarding potential effects on rental prices, real estate investment, and tax compliance.
The new tax framework imposes a 20% levy on net rental income, in addition to a 10.5% municipal tax, forcing landlords to allocate a significant portion of their earnings to tax payments.
Real estate agent and tax expert Noureddine Mourid explained that the new tax measures raise questions about their impact on Morocco’s rental market. While the 20% income tax and 10.5% municipal levy are steps toward formalizing the sector, they pose challenges for landlords.
One major concern is the potential shift of the tax burden onto tenants, especially in major cities where rents are already high. Without effective price control mechanisms, landlords might increase rental rates to compensate for the taxes, putting additional financial pressure on lower-income households.
Mourid also highlighted the potential impact on real estate investment. Residential rental properties, once considered stable investment assets, may become less attractive due to rising tax costs.
Investors might redirect their focus toward sectors with higher profit margins and lower tax burdens, such as commercial real estate or tech industries, potentially slowing growth in the residential rental market and reducing housing supply.
Furthermore, compliance with these tax regulations remains uncertain. Some landlords may opt to operate in the informal economy to evade taxes, exacerbating the divide between the formal and informal rental sectors. Increased tax evasion could make it harder for authorities to track rental income accurately, undermining efforts to regulate and tax the market effectively.
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