Rental income in Morocco 2026: 5% withholding tax, new income tax brackets and obligations for property-owning Moroccans abroad

Since the 2025 Finance Law, the liberatory withholding tax rate on Moroccan-source rental income received by non-residents is 20%. This rate applies to the gross rent amount, without deduction. It is withheld by the tenant (if a professional) or paid directly to the DGI by the non-resident owner. Payment releases the landlord from any additional declaration obligation for this income.

The withholding obligation falls on the tenant only if they are a legal entity (company, association) or a natural person subject to accounting (trader, liberal professional). If the tenant is a private individual (natural person not subject to accounting), it is the MRE owner who must declare and pay the withholding tax to the DGI before March 1 of the following year.

Yes, in principle. The MRE's country of residence taxes worldwide income, including real estate income from foreign sources. However, bilateral tax treaties between Morocco and most European countries (France, Belgium, Spain, Netherlands) provide that real estate income is taxable in the country where the property is located (Morocco). Double taxation elimination is provided through the tax credit or exemption mechanism in the country of residence.

Under the liberatory withholding tax regime (20% of gross), no deduction of expenses is possible. The tax is calculated on the gross rent amount. If the owner opts for the actual profit regime (annual declaration to the DGI), they can deduct actual expenses (depreciation, repairs, management fees, loan interest). This choice must be made explicitly and requires regular accounting.

The MRE can receive rent directly to their Moroccan bank account (MDM account in convertible or non-convertible dirhams) or to a foreign account if the tenant makes an international transfer. In practice, it is simpler to receive rent to a Moroccan account through a representative (relative or rental management agency). The Office des Changes authorizes repatriation of net rental income abroad upon presentation of tax evidence (withholding tax payment receipt).

Yes. The MRE who owns property in Morocco must have a Tax Identification Number (IF) issued by the DGI. This identifier is necessary for any tax declaration and for paying the withholding tax. The IF can be obtained online at tax.gov.ma or from the relevant tax service. A representative in Morocco can carry out this procedure by power of attorney.

The Communal Services Tax (TSC) is an annual local tax calculated on the gross rental value of the property (a tax separate from income tax on rental income). It applies to all property owners in Morocco, whether resident or non-resident. The rate is 10.5% in urban areas and 6.5% in peripheral or rural areas. The TSC is due even if the property is occupied free of charge or is vacant.