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information part 2 Morocco

Discussion in 'Morocco Property' started by Key Mortgages S.L, Jun 21, 2008.

  1. Key Mortgages S.L

    Key Mortgages S.L New Member

    You can take out of Morocco at sale of the property the following.

    Any monies physically transferred into Morocco for the purchase
    Any monies paid off the capital of the mortgage for the term you have held it but not the interest payments.

    On top of this money you can then take profits minus the 20% capital gain tax up to the sum of the above.

    From this you can see that taking a mortgage rather than paying cash will limit the amount of profit you can take out the country unless you run the mortgage for the full term and make full capital repayments. You should therefore consider all options available to you such as equity release in the UK as if you do this you move more funds into Morocco and open up the scope for taking out a higher level of profit at sale.

    On the plus side the Morocco mortgage keeps your assets and liabilities separate to anything you have and wish to do in the UK both now and for the future.

    Please see below an example of profit repatriation as it relates to taking a mortgage in Maroc.

    Cash buyer

    Purchase € 100.000
    Closure costs € 5.000
    Total funds moved into Morocco € 105.000

    At sale the client can take back € 105.000
    Plus profits minus capital gains tax up to another € 105.000

    Mortgage buyer using Maroc property as security

    Purchase € 100.000
    Closure costs € 5.000

    Deposits 30% plus closure costs € 35.000
    Mortgage € 70.000
    Total € 105.000

    At sale client can take back € 35.000 moved into Morocco
    Assume € 5k paid off mortgage € 5.000
    Total € 40.000

    At sale client can take back the € 40.000 of deposit and mortgage repayments
    Plus profit minus capital gains up to another € 40.000

    If capital growth and net profits does not exceed € 40k then client can take back all their original funds plus all their profit however any profits above the € 40k would have to remain in Morocco.

    The cash buyer on the other hand can take back the money put into the purchase plus closure costs and profits up to € 105.000. If they take a mortgage against a property not in Morocco then they become as far as the Maroc government is concerned a cash buyer and all the funds can be seen to physically have been moved into Maroc. Basically you can take profits out up to the same level as monies you moved into Morocco in the first place plus the physical funds moved into Morocco. A mortgage taken in Maroc does not qualify as monies moved in which is why it limits the amount of profit that can be taken back at a later date.

    These are the current rules on repatriation of profits. These may be subject to change and legal advice should be taken on you’re the specific implications for you before proceeding.

    Please also note all clients after approval have to physically go to the bank present themselves and their original documents to open the bank account for payments this must be done before completion.
  2. redangel7861

    redangel7861 New Member

    Great information. Thanks.

    You state in both examples that any profits above your intial capital + closure costs + equivalent in profits ( i.e. intial capital + closure costs ) has to remain in Morocco.

    It there any point in time at which you can repatriate these excess profits back to your country of origin??

  3. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member


    Keymortgages SL:
    Are you saying that irrespective of what profit you make you can only take out the
    same amount of money introduced into Morocco. So from your example

    If I take in €105,000 and I sell the property for say €310,000. ( Ignoring Tax )

    I can take out €105,000 as capital introduced into Morocco & my gain after capital gains Tax another €105,000= €210,000 is what I will be allowed and the rest €310.000 -€210,000= €100,000 cannot be taken out. This means that there is a cap of how much you take out and this cannot be more than the amount that was introduced at the time of purchase.

    The same correlation will apply for €35,000 in your second example .

    Please confirm or correct me and for the benefit of the other users.

    I also find it curious that as we are suppose to service our mortgage in foreign exchange, we should be able to take this out as well. If the mortgage was serviced in MAD, I could than understand that this would be transfer of capital.
  4. John

    John New Member

    Would love to see an answer to both posts above. Great thread by the way, nice information.
  5. Key Mortgages S.L

    Key Mortgages S.L New Member

    Morocco information


    Sorry for taking so long to get back.

    The examples I have given are the simplest way to show what can be done. This information has been put together from our experience and knowledge of dealing with banks and lawyers.

    I would advise anyone to who is buying to check this with their lawyer.

    But yes you can not take all profit out.
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