How to bag a property bargain in Morocco

Morocco is on a mission to attract foreign buyers - but you'll have to move quickly to snap up the best bargains. Graham Norwood reports
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The Independent Online

Say "Morocco" and most people think of Marrakech. But Marrakech is not the only place in Morocco that is having a love affair with selling homes to foreign buyers.

Since 2004, the North African country has put tourism and development at the top of its agenda. In the first nine months of 2006, visitor numbers rose by 9 per cent compared to 2005. Their spending rose 26 per cent, suggesting longer visits by more affluent tourists. By the end of this year, 6.5 million foreigners will have been to the country, up from 5.8 million last year.

The Moroccan government aims to attract 10 million visitors a year by 2010. There's even a permanent exhibit at Disney World to tempt US tourists - a strident move for a Muslim country these days.

The government has a raft of plans: to create six coastal resorts (five on the Atlantic Coast and one on the Mediterranean), to upgrade regional airports to attract budget airlines to locations other than Marrakech, to increase flight capacity over the country, and to build a new high-speed train service. It's even looking at the possibility of digging a tunnel to Spain under the Strait of Gibraltar.

Morocco means business. It is modernising property-buying processes for foreigners who are looking to buy holiday homes. "It was incredibly difficult for a foreigner to buy just five years ago, but now it's pretty easy," says Tony Roberts, who has just become the Marrakech-based representative of the upmarket UK estate agency Savills. The firm's move into this market is a sign of how many Britons are now interested in this North African country.

There are no figures on the level of foreign ownership of property in Morocco, but there is a wide choice of homes across the country in diverse locations, from sandy beaches to snowy peaks.

In the Atlas Mountains, there is North Africa's top ski resort, Oukaïmeden, which at 3,250m above sea level is a "snow-assured" location, despite the threat of global warming. There are three-bedroom villas close by in a scheme called Domaine de L'Akhdar starting at £225,000 (from Colliers CRE, 020-7344 6601). "Morocco has been seen as a winter-sun destination but with the plans for Oukaïmeden, it will be the best of both worlds," says Colliers' Jonathan Salisbury.

On Morocco's Mediterranean coast there is Saïdia, a £1.1bn golf and marina resort on 1,730 acres of land stretching along six kilometres of beachfront. This is one of the country's six new resorts, and 3,000 holiday homes there are to be marketed worldwide. There will also be six hotels, three golf courses and a marina with 750 moorings. Capital appreciation in the scheme runs at about 30 per cent per year, according to the UK selling agent Saffron Villas (01635 253 121), so some of the best bargains will have been snapped up already.

"Investors can benefit from exemption from rental income tax for five years, no capital gains tax if the property is sold after 10 years, and no inheritance tax," says Gerry Jones of Saffron.

Elsewhere on the Moroccan coast is Aglou Plage, which is an hour south of Agadir by car. There are good facilities, several French restaurants and it is close to the pretty towns of Tisnet and Mirleft, which are popular with the many French visitors to the area each year.

A new development here is Diors el-Janoub, which will have about 200 villas and apartments. Those remaining on sale are going for €276,000 to €406,000 (through Moroccan Properties, 00212 024 430 465).

Morocco's tactics in opening up its market to foreign buyers appears to be paying off. Next year, another top-end British estate agent, Hamptons International, launches a scheme in Tangier. There are also schemes coming on-stream in the New Year in Casablanca. The city is an industrial centre, and regarded as less desirable than most of the rest of Morocco, despite the romantic connotations conjured up by the Humphrey Bogart film.

In 2007, the authorities in Marrakech will begin a process to log more of the city's older properties with its land registry, to make them easier for foreigners to buy in future.

"I've lived here a year and love Morocco," says Tony Roberts. "There's only one snag: more people are realising that it's a great location. Prices are still cheap, but soon they may not be."

Buyers' guide

* Any newly built property, or an older one sold in the past five years, will be fully documented with a titre foncier and a number lodged with the Moroccan land registry. But if you want to buy a traditional riad that has not already been sold since 2000, it will probably have an Islamic melkia title, which are not strictly recognised by the Moroccan land registry. "If you buy a property or a farm or parcel of land that has a melkia title, you must get signed approval and acceptance of the sale from all members of the owning family," says Tony Roberts. "This transaction has to be recorded by an adoul, a scribe recognised under shariah." Mr Roberts recently sold an old riad in Marrakech and had to obtain 13 family signatures from people based in Marrakech and other Moroccan locations including Tangier, Fez and Casablanca, plus one living in Switzerland.

* Once you agree the purchase with the owner, you should budget for 6 per cent extra to cover stamp duty (2.5 per cent of purchase price), legal fees (0.5 per cent), notary fees (0.5 per cent) and land registry (up to 2 per cent).

* There is no tax on rental income for the first five years. Capital gains tax is charged at 20 per cent of profit with a minimum of 3 per cent of the sale price if the property is sold within five years, then 10 per cent if sold between five and 10 years, then zero after 10 years. There is no inheritance tax for family members, but you must make a Moroccan legal will and seek tax advice.