Overview of the Medina Center

The medina center is a unique space recreating the atmosphere of an ancient medina.

Its structure, architecture, planning and atmosphere were designed to let you experience enjoyable moments in an original surrounding. In this warm and friendly environment, more than 150 shops display their wares.

The medina center is a commercial hub in an attractive setting making it the ideal place to make your franchises and shops prosper.

Buyer manual

The acquisition of real estate property is offered by our group within the legal context of bill #44-00, dated October 3rd 2002, relating to the sale of property under construction (VEFA). This “sale off construction plans” is a contract that binds the developer and the buyer.
The developer commits to the construction of a building within a set deadline and the buyer commits to progressively acquit the sale price as the construction work progresses.

The finalization of your real estate purchase in Morocco must be done through a notary public, who will hold the purchase funds. The buyer can make payments as the construction of the purchased building advances according to a payment plan previously agreed upon with the developer.

Financing your purchase

For residents in Morocco

• You have the necessary funds:

All you have to do is get in touch with the notary public in charge of the sales and he/she will assist you with the required formalities.

• You are financing part of the purchase through a real estate loan:  the amount financed and conditions are determined by your reimbursement ability and available collateral to guarantee the loan application at your bank.

Tip : In Morocco, your bank can offer you 100% financing if all conditions of the loan are met.
 
For non-residents and foreigners

• You have the necessary funds:

You can either transfer the funds through a SWIFT wire transfer to our Moroccan bank account (account in convertible Dirhams) or pay with a check at the signing of the contract under the supervision of a notary public, or through a SWIFT wire transfer from your overseas account to the account of the notary public in charge of the transaction.


• You are financing part of the purchase through a loan contracted in Morocco:
The bank will request that you provide at least 30% of the purchase price as well as all fees connected to the sale (notary tax, recording fees, etc). You will be asked to open a bank account in convertible Dirhams. Loan premiums will be paid through this account.

• You are financing part of the purchase through a loan contracted in your country of residence:

The intermediary Moroccan bank will issue a matching credit according to the short or long term loan contracted to you by the foreign bank for the purpose of purchasing a residence in Morocco.

To be eligible, prior to the transaction, you will have to give the local bank matching your loan a sworn statement declaring that you do not already own property in Morocco.

This intermediary bank will require a first level mortgage on the property acquired meeting at least the guaranteed amount and verify the complete repatriation of the total price of purchase, including all fees connected to the sale (notary tax, recording fees, title registration fees, etc).

Tip : We strongly recommend you make your transfer through an account in convertible Dirhams.

VEFA contracts

The sale of property under construction (VEFA) requires a preliminary contract and a final bill of sale. A reservation contract can initially be written as an option on a property to guarantee the client the purchase of a specific lot.

Reservation contract

This type of contract is subject to all laws and regulations in effect in Morocco. It is a conventional contract through which the developer agrees to reserve the potential sale of a real estate property to a potential buyer.

The reservation contract normally contains a detailed description of the property, habitable space, number of rooms and annexes, sale price, payment plan and the down payment amount.

The following documents are given to the reserving party at the signing of the reservation contract:
•    A basic description note;
•    An overview plan of the entire real estate project;
•    The plan of the reserved real estate lot.






Preliminary contract

This contract is compulsory and can only be drawn after ground level foundations are achieved.

It has to mention mandatory requirements and define the real estate property or the part of the real estate property in question in the contract, the delivery date, the price and payment plan, the refund guarantee, co-ownership bylaws…)

The specifications mention the relevant information about the technical aspects of the property, the type and quality of building materials, the equipment as well as the construction deadline and delivery date of the building.                                These specifications are signed by both parties and a registered copy is handed to the buyer.

An initial draft of the preliminary contract is given to the buyer prior to the signing day. The buyer will have to pay the purchase price as the construction progresses and the developer remains the principal contractor until the project is delivered. He will lead all building operations and manage relations with architects and companies involved in the project.

Final bill of sale

The transfer of ownership of the sold property comes into effect after the signing of the final bill of sale under notary supervision and the deed registration on land records ( note the difference : in other countries, ownership is transferred at the signing of the preliminary contract).

The signing of said final contract takes place after the purchase price has been paid in full, the completion of all construction work and the delivery of the move-in permit.

GUARANTEES TO THE BUYER

The buyer benefits from several guarantees within the VEFA framework:

- Refund guarantee

The developer must provide the buyer with a legally required guarantee of refund at the time of the signing of the preliminary contract. This guarantee can be in the form of an insurance or certification of credit ( from a bank or similar) so that the refund of all moneys received is verified in the eventuality that it becomes impossible to finish the projected construction.

- Prenotation
To safeguard the rights of the buyer, the law applies prenotation. The buyer can request a prenotation to temporarily retain his right. The role of a prenotation is to temporarily retain an existing right that is delayed by a yet to be accomplished formality. The prenotation remains valid until the registration of the final sale contract on the deed of the building.

- Hidden defects warranty

The developer is obligated to the buyer to guarantee any hidden defects up to one year after delivery of the property. This is in addition to the visible defects that the buyer knew of or could easily have noticed.

- Decade warranty
For a period of 10 years after the completion of all works, the decade warranty covers all the damages that compromise the solidity of the building and could imperil its constitution; therefore rendering the site unfit ( defective roof, water leaks, shaky walls or cracked foundations…)

TAX REQUIREMENTS FOR THE BUYER

Becoming a property owner in Morocco implies exposure to various taxes.

Follow the main duties that will be required of you:

Purchase fees

For built properties or land lots destined to be built, the purchase fees vary from 5 to 6% of the purchase price.

After the purchase

In Morocco, buying real estate property will expose you to several types of public taxes:


Urban Tax

This tax is based on the rental value of the purchased property and varies from 10 to 30%. It is determined through comparison or appraisal by the census committee. The rental value is revised on a yearly basis.

All new properties are exempt from this tax until five years after the delivery of the move-in permit. You may also benefit from a 75% rebate if this is your primary place of residence.

Moroccans residing overseas can benefit for this same rebate if their parents or dependants live in this property.

Rental earnings

In the case that the property is rented, you will have to declare the earnings derived from the rental. These earnings will be exempted from the General Revenue Tax (IGR) for the first three years after completion of construction.

After that, you will benefit from a 40% rebate on rental earnings subjected to the IGR.

Public works Tax

This tax represents 10% of the yearly rental value used to figure out the value of the urban tax.

You may be subjected to the TPI if you decide to sell your property. This tax is based on the difference between sale and purchase prices. It is a fixed rate of 20% and can never be lower than 3% of the sale price.

The owner can be exempted from this tax if the property was his/her primary place of residence for more than eight years.
If Moroccans residing overseas decide to sell a property that was occupied by parents or dependants for at least eight years, the sale will be considered that of a primary place of residence.

It is important to bring to your attention that there exist bilateral fiscal agreements preventing double taxation between Morocco and several European countries.
The notion of fiscal residence will determine whether you will be subjected to the Moroccan income tax regime or not. Only the people residing in Morocco are considered fiscal residents in Morocco.