VAT and new-build property in Morocco: who pays what, from VEFA to handover

1. Property VAT: the developer's business — funded by the buyer

First point, which clears up most of the confusion: property VAT does not concern individuals selling their own property. It applies to real estate development operations and, more broadly, to the sale of buildings carried out within a commercial or professional activity. The legal taxpayer is therefore the developer: it is the developer who invoices, declares and remits the tax to the tax administration.

The buyer, for their part, files no VAT return and pays nothing directly to the DGI on this account. They bear it economically: the sale price communicated by the developer is an inclusive-of-all-taxes price. When you compare two new programmes, you are therefore comparing prices that already contain the tax — and when you compare new to old, you are comparing a price with VAT to a price without VAT. We will come back to this, because that is where misreadings of the market hide.

2. New and old: two different tax circuits

• Buying in the old stock (resale between individuals): no VAT. The buyer pays the registration duties; the seller settles, where applicable, the tax on real estate profits (TPI) on their gain. The detail of the rates is in our 2026 property taxation guide.
• Buying new (from a developer): VAT is included in the price, and the buyer pays the registration duties, the land registry fee and the notary's fees on top. VAT replaces nothing: it adds, inside the price, to the classic acquisition costs.

In other words: in the old stock, the taxation of the transaction is visible (separate lines at the notary); in the new, part of the taxation is invisible because already melted into the displayed price. It is a difference of presentation, not of existence.

3. Which VAT rate for which new-build home?

The regime depends on the segment of the programme:

• Standard rate of 20 % — general regime: standard real estate development, mid- and high-standing housing as well as commercial premises sold off-plan (VEFA).
• Reduced rate of 10 % — economic housing: area of 100 sqm or less, price capped under the finance law in force, residential use.
• Lighter regimes — social housing and low-value housing (LFI): specific schemes, under conditions of area, price and use, lighten the tax burden of these segments. The exact parameters are governed by the applicable finance law: have the regime of your programme confirmed by the developer and by your notary before signing.

The practical point to keep in mind: you do not have to « choose » a rate or calculate it — it is the regime of the programme that determines it, and the developer who applies it. Your role is limited to checking that the contract is consistentwith the segment announced (an « economic home » sold above the caps is not one) and that the price is indeed inclusive of tax.

4. In VEFA: VAT follows the price schedule

The off-plan sale is governed by law 44-00 (enacted on 3 October 2002, amended by law 107-12 in 2016): a preliminary contract drawn up by a notary or an adoul — a simple private deed is null —, the buyer becoming owner of the ground from signature, then of the structure as it is built. Our complete VEFA guide details the guarantees (perfect completion, two-year, ten-year, bank guarantee or mortgage).

On payments, the law strictly caps the schedule: 20 % at the signature of the preliminary contract, 30 % at completion of the shell, 30 % weathertight, 20 % at handover. And this is where the VAT mechanics become simple: the price agreed in the preliminary contract being an inclusive-of-tax price, each payment call is a fraction of this inclusive price. The tax is not the subject of a separate payment from the buyer at any stage — neither at signature, nor during the works, nor at handover. Its declaration and remittance to the administration are a matter for the developer's accounting, under the rules in force that concern only the developer.

• At signature: have it expressly stated that the price is inclusive of all taxes, and ask for the net-of-tax / VAT breakdown. No text forbids it, and this transparency neutralises any attempt at a « VAT supplement » along the way.
• During the works: every payment call must correspond to actual progress and stay within the legal cap — a less favourable schedule is forbidden. A payment call presented as a « VAT top-up » outside the schedule should alert you immediately.
• At handover: law 44-00 allows retaining 5 % of the price until the defects observed are corrected. Hence the value of a technically documented handover: it is the last moment when you have a financial lever.

5. VAT + registration duties: the combination the buyer must budget

Second frequent confusion: believing that « the new, with its VAT, exempts you from registration duties ». That is false. The two levies coexist and add up in a new-build acquisition, they simply do not go through the same channel:

• VAT: inside the price, handled by the developer (see above).
• Registration duties: borne by the buyer, paid at the notary on registration of the deed — 4 % for a building constructed for residential use, 5 % for commercial or mixed-use premises, minimum levy of 1,000 MAD, rate of 3 % for social housing under conditions. They are calculated on the price stated in the deed, or on the market value of the property if that is higher; the exact basis applicable to your deed is to be confirmed with your notary.
• Ancillary costs: land registry fee (1.5 %, ANCFCC) and the notary's fees — an overall acquisition-cost budget of the order of 6.5 % at most of the price, excluding financing.

The basis rule deserves a moment of attention: if the administration considers the declared price lower than the real market value, it can carry out a reassessment on the corrected value. The subject is less frequent in the new (developer prices are public and documented) but it exists, notably on atypical lots or sales with substantial discounts. An independent appraisal report establishing the value of the property protects both parties.

6. What VAT changes in reading the developer price

This is the angle buyers neglect most. Comparing a « new » price per sqm to an « old » price per sqm in the same neighbourhood means comparing a price VAT included to a price outside the scope of VAT: part of the gap between the two is not property value, it is taxation. Conversely, the buyer of new buys finishes, legal guarantees and a property with no wear — so the gap is not « only » tax either.

Disentangling the two — what, in the price asked, relates to the real value of the property delivered, and what relates to the commercial positioning of the programme — is precisely the work of an independent appraisal before signing: analysis of the inclusive price asked against the relevant comparables, the contractual finishes and the state of the local market. The report, produced by RICS-certified experts and compliant with Red Book standards, gives you an objective basis to negotiate with the developer — price, discount, finishes or schedule terms. Report within 5 to 8 days (48-72 h express), from 3,500 MAD excl. tax, quote within 24 h.

7. Checklist before signing with the developer

• Notarised preliminary contract (notary or adoul) — never a private deed, it is null.
• « Inclusive-of-all-taxes price » statement and net-of-tax / VAT breakdown in the contract.
• VAT regime consistent with the segment announced (20 % general, 10 % economic under conditions, specific social regimes) — to be confirmed by the notary.
• Schedule compliant with the legal cap 20 / 30 / 30 / 20, correlated to actual progress of the works.
• Acquisition-cost budget on top of the price: registration duties (4 % residential), land registry fee (1.5 %), notary.
• Independent appraisal: before signing to objectify the price asked, and at handover to document the defects and activate the 5 % retention under law 44-00.

8. FAQ

Note: VAT rates, the conditions of the preferential regimes (economic, social, LFI housing) and registration duties are governed by the General Tax Code and the finance law in force; VEFA is governed by law 44-00 amended by law 107-12. Confirm the regime applicable to your programme with your notary before any commitment. To objectify the price of a new-build home or document a handover, see our real estate appraisal page or the blog.