1. The principle: from rent collected to net taxable income
For an individual letting a dwelling, the rents received fall under the category of rental income, subject to income tax (IR). The calculation follows a three-step logic:
- Gross rental income: the sum of the rents actually collected over the year (plus, where applicable, certain charges placed on the tenant and borne by them on behalf of the owner).
- The flat-rate abatement: the regulations in force provide for an abatement applied to the gross rental income, intended to cover the owner's charges on a flat-rate basis. This gives the net taxable income.
- The progressive income tax scale: this net income enters the tax calculation according to the income tax scale. The rates, brackets and the exact level of the abatement change with each finance act.
A point of attention: as the abatement rate and the scale brackets are liable to change, we deliberately stay generic here — confirm the figures applicable to your tax year with your notary or a tax adviser. What does not change is the mechanics: gross, abatement, net taxable, scale.
2. Two circuits depending on the tenant's profile
Until recently, the scheme was single: the landlord collected the entire rent then paid their tax at the declaration deadline. Since the 2026 Finance Act, two situations must be distinguished depending on who the tenant is.
- Individual tenant (classic residential): no withholding at source. The landlord collects 100% of the rent and applies the classic declaration regime described above — gross income, abatement, income tax scale, annual declaration.
- Professional tenant: from 1 July 2026, a 5% withholding is made by the tenant on the rent excl. VAT. The landlord receives only the balance, and the withholding comes as an advance on their final tax.
The essential point to remember here: the withholding creates no new tax, it merely shifts the moment the State collects its share.
3. Who is the «professional tenant» who must withhold?
The 5% withholding is due by the tenant — turned collector — when they belong to one of the following categories:
- Legal entities subject to corporate income tax (IS) (SARL, SA, etc.);
- Individuals under income tax (IR) in the actual net-result (RNR) or simplified (RNS) regime;
- The State, local authorities and public establishments;
- Credit institutions and similar bodies;
- Insurance and reinsurance companies.
Conversely, an individual renting to another individual in residential letting remains out of scope. The decisive criterion is the status of the payer, not the nature of the property: an apartment rented to a company to house its executives moves into the withholding circuit, whereas the same apartment rented to a family does not.
4. The interplay of the two regimes: the withholding is an advance
The common confusion is to see the 5% withholding as a separate tax. It is not one. It is a withholding on accountthat is credited against the landlord's final rental tax:
- The landlord calculates their tax on their net rental income (gross, abatement, scale), as usual, at the time of their declaration.
- They deduct from this tax the total of the 5% withholdings already made by their professional tenants during the year.
- If the total withheld exceeds the tax due, the difference is settled; if it is lower, the landlord tops up at the time of the declaration.
Concrete consequence: for a landlord let to a professional, the total annual tax does not change, but their cash flow does — they collect 95% of the rent instead of 100%, the State taking its share as it goes. To be anticipated, especially if the property is debt-financed.
5. The landlord's declaration obligations
Whatever the tenant's profile, the landlord remains liable for declaring their rental income. The right reflexes:
- Keep track of the rents collected over the year, property by property, to reconstitute the gross rental income.
- Collect the withholding certificates from professional tenants: without them, it is impossible to credit the 5% withholding against the final tax.
- Declare in the required form and deadlines provided by the regulations. The declaration terms and deadlines fall under the texts in force — check them for your situation.
- Distinguish the regimes if you have several properties: an apartment rented to an individual and a premises rented to a company do not follow the same cash-flow circuit.
The case of the non-resident landlord (MRE) calls for a case-by-case analysis, according to the applicable tax treaty: consult a tax adviser before any decision.
6. The real issue for the landlord: the real net yield
Taxation is only part of the equation. What determines the performance of a rental property is the real net yield: market rent, occupancy rate, charges, and now the cash-flow mechanics linked to the 5% withholding. On long leases signed under the old rules, this net yield may have materially changed.
This is precisely what an independent appraisal compliant with RICS (Red Book) standards makes it possible to objectify: the market rental value of the property, the real net yield after charges and taxation, and the consistency of the rent charged with its location. Useful to set a rent on reletting, arbitrate an investment, or document a file. To be distinguished from a simple free estimate, which documents neither the method nor the comparables.
7. The lease framework: do not confuse taxation and rental law
One last useful reminder: the tax regime of the rent says nothing about the legal framework of the lease itself. The rights and obligations of the landlord and tenant of a dwelling fall under law 67-12 on residential letting: term, security deposit, inventory of fixtures, revision and termination. Drafting the lease well and establishing a contradictory inventory of fixtures upstream avoids most disputes — and an inventory documented by an independent third party saves time in the event of a disagreement at move-out.
8. FAQ
Are all rents taxable to income tax?
Residential rents received by an individual constitute rental income subject to income tax: you start from the gross rental income, apply the flat-rate abatement provided by the regulations to obtain the net taxable income, then the progressive scale. The rates, abatements and thresholds change with each finance act — confirm them with your notary or a tax adviser.
I rent my apartment to an individual: am I affected by the 5% withholding?
No. The 5% withholding targets rents paid by professional tenants (IS companies, individuals under the RNR/RNS regime, State, local authorities, public establishments, credit institutions, insurance companies). An individual renting to another individual in residential letting remains on the classic declaration regime.
Does the 5% withholding add to my tax?
No, it is an advance. You calculate your tax on your net rental income, then you deduct the total of the withholdings already made by your professional tenants. If the total withheld exceeds the tax due, the difference is settled; otherwise, you top up at the declaration.
Since when does the 5% withholding apply?
From 1 July 2026, on income from the letting of buildings paid, made available or recorded in accounts from that date. It is the date of payment that counts, not that of the signing of the lease.
How do I find out the real net yield of my rental property?
Through an independent appraisal compliant with RICS (Red Book) standards: it establishes the market rental value, includes the charges and the cash-flow mechanics linked to the withholding, and returns the real net yield. Report within 5 to 8 days (48-72 h express), from 3,500 MAD excl. tax, firm quote within 24 h.
Find out the real net yield of your rental property
RICS-certified experts — market rental value, charges and real net yield after the 2026 withholding mechanics, in a report compliant with RICS (Red Book) standards. Within 5 to 8 days (48-72 h express), everywhere in Morocco.
Note: General information article. The abatement rates, the income tax scale brackets and the declaration terms fall under the tax texts in force and change with each finance act — the 5% withholding on rents applies from 1 July 2026. Confirm your situation with your notary or a tax adviser. To document the rental value and yield of your property, see our real estate appraisal page or the real estate blog.