TVA and TPI - How much should be payable?

[lurcher21]

Is there anyone on the forum who can please explain how the TVA is calculated on the sale of a property in Morocco? Is it calculated by deducting the purchase price of the land from the selling price of the completed property? If so, what percentage? How much approximately should be payable if the selling price of the house is 1450000 dhs and the purchase price of the land is 300000 dhs. We have been badly misinformed by the Notaire handling the sale of our property, who prior to the sale told us the maximum taxes payable (both TPI and TVA) would be no more than approximately 50000 dhs. This was a blatant lie and we have found ourselves paying so much in taxes that we are actually losing money on what the property cost us almost 10 years ago!! Is there a way of making a formal complaint against a notaire in Morocco - or are they a law unto themselves? The notaire knew full well that these amounts would have to be paid prior to us signing the Acte de Vente - as she was and still is holding a large chunk of the sale proceeds until these taxes are paid and we have the Quittus.

 

[Lee Filkins]

Lurcher21: Sorry cant answer your question. I am however hearing a lot similar stories about misinformation, deception and not from agents, developers only but from lawyer, notary etc.

In most countries with advance legal system/supervision its very difficult to find them short of acceptable standard. Their supervisory bodies close rank and in my opinion they don't have independent trained people with teeth to pin them down, Not much chance in a Country like Morocco with deeply embedded corruption.

 

[lurcher21]

Yes, well once you get your fingers (badly) burned..........!

Update - we ended up paying TPI (Capital Gains Tax) on an extra 500000 dhs worth of non-existent profit as the tax office decided the house was worth more than we sold if for! The same was happening to all sellers - Moroccans too.

 

[Tangier]

Is there anyone on the forum who can please explain how the TVA is calculated on the sale of a property in Morocco? Is it calculated by deducting the purchase price of the land from the selling price of the completed property? If so, what percentage? How much approximately should be payable if the selling price of the house is 1450000 dhs and the purchase price of the land is 300000 dhs. We have been badly misinformed by the Notaire handling the sale of our property, who prior to the sale told us the maximum taxes payable (both TPI and TVA) would be no more than approximately 50000 dhs. This was a blatant lie and we have found ourselves paying so much in taxes that we are actually losing money on what the property cost us almost 10 years ago!! Is there a way of making a formal complaint against a notaire in Morocco - or are they a law unto themselves? The notaire knew full well that these amounts would have to be paid prior to us signing the Acte de Vente - as she was and still is holding a large chunk of the sale proceeds until these taxes are paid and we have the Quittus.

From what I understand is that you must pay tax on the declared profit of the sale. So when you purchased the property what price was declared on the documentation, the same applies what price was declared on the sale?
Based on the figures you have provided you have decalred 300,000 dhs on the purchase and sold for 1,450,000 dhs so the profit is 1,150,000 normally the most you would pay is 20% on the profit but if you have owned the property for more than 8 years there is a reduced sliding scale of tva. So based on the worse case scenario you would be liable for TVA of 230,000 dhs. However, if you had the correct permisions to build or renovate the property and you have kept all your receipts you may be able to negotiate a further reduction. When I sold my property I had the same problem with bad advice from the notiare so I went myself to the office of tax and impot put all my cards on the table and negotiated a reduction myself with the director of taxes.

In addition, you will need to pay any selling agents fee if you sold using an agent which is normally 3% of the selling price plus tva so 52,200 dhs plus you will pay the fees of the notaire or adul depending on the title deeds of the property.

I dont know what city you are in in Morocco I am based in Tangier, we have access to an excellent english speaking lawyer here, if you need any further assistance you can email me [email protected]