Tax-Deductible Works in Morocco: Guide for Landlords (2026)

Updated 2026. Maintaining and renovating a property is a major cost for owners. The good news is that, when properly documented, tax-deductible works in Morocco can significantly reduce your tax bill, provided you know exactly which regime they fall under. Since the 2019 reform, deductibility no longer works the same way for bare (unfurnished) rentals, for furnished and tourist rentals, or at the moment of resale. With more than 25 years of expertise between Marrakech and Agadir, the Armonia Solutions team has compiled in this 2026 guide the applicable rules, summary tables, a tax-saving simulator, a worked example and a detailed FAQ.

For British and international landlords in particular, getting this right is the difference between a renovation that quietly erodes your return and one that legitimately lowers what you owe. This guide is general information, not tax advice; for your own situation, confirm the details with a Moroccan accountant or directly with the tax authority.

Tax-deductible works in Morocco: the key figures 2026

The following scenarios are indicative and illustrate, at a representative rate, the saving that a given amount of deductible works can generate. They are not a real client case.

Amounts are in Moroccan dirhams (MAD), with US dollar equivalents for guidance (indicative rate of around 10 MAD to 1 USD). The exact saving depends on the regime and the applicable rate.

Where are works actually deductible? The three regimes to distinguish

The single most important thing to understand is that “deductible works” does not mean the same thing in every situation. Moroccan tax law treats three cases very differently: a bare (unfurnished) long-term rental, a furnished or tourist rental, and a resale. Confusing them is the most common, and most expensive, mistake an owner can make. The sections below set out each case in turn.

Bare rental: no deduction since 2019

For a property let unfurnished on a long-term basis, the 2019 reform removed the ability to deduct works from rental income. Rental income is now taxed on a simplified basis without an itemised deduction of renovation costs against the rents. In practical terms, if your property is let bare, you should not expect to offset a new bathroom or a re-roofing against your rental income. This does not mean the spending is lost, it may still count at resale, as explained below, but it cannot reduce your annual rental tax.

Furnished and tourist rental: deduction comes into its own

The picture is very different for a furnished or short-term tourist rental, the typical case for a riad or a villa let to travellers. Under the real-profit regime, the owner can deduct the genuine costs of running the property, including maintenance and repair works. For an actively managed riad or villa with a pool, the real expenses almost always exceed the simplified allowance, which makes the real regime the more advantageous choice. The trade-off is that proper accounts must be kept, an effort that quickly pays for itself.

At resale: works increase the acquisition price

When you sell, qualifying works are added to your acquisition price, which reduces the taxable profit and therefore the property profits tax (TPI). If you cannot produce invoices, the law allows a lump-sum uplift of 15% of the purchase price in lieu of actual works. With proper invoices, however, large renovations can far exceed that 15% and produce a substantially bigger reduction in tax. This is why keeping every works invoice is so valuable for an investor planning to sell one day.

Which works qualify? The DGI reading grid

Broadly, the tax authority (the Direction Générale des Impôts, or DGI) distinguishes genuine improvement and major renovation works, waterproofing, structural repairs, bathroom and kitchen overhauls, the creation of a pool, from routine décor. The decisive factors are that the work is real, that it is invoiced by a registered Moroccan company, and that it is paid through traceable means such as a bank transfer. A cash payment with no proper invoice will not be accepted. Official guidance is published by the tax authority on the DGI portal; for borderline cases, a Moroccan accountant can confirm whether a given item qualifies.

Illustrative example (simulation): a renovated riad in the Marrakech medina

Illustrative example (simulation), indicative figures, not a real client case. James, a British investor, buys a riad in the Marrakech medina in 2019 for 1,800,000 MAD (≈ 180,000 USD). He carries out 600,000 MAD (≈ 60,000 USD) of heavy renovation, terrace waterproofing, rebuilt bathrooms, the creation of a plunge pool, all invoiced by a registered Moroccan company and paid by bank transfer. In 2025 he resells the property for 3,100,000 MAD (≈ 310,000 USD).

The saving is roughly 120,000 MAD (≈ 12,000 USD). On properties with a larger capital gain, the proportional saving is greater still. The figures are illustrative and depend on the exact purchase and sale prices and on the documentation held.

Tax-saving simulator on deductible works

Estimate the tax saving from your deductible works. Enter the amount of works (MAD) and the applicable rate (for example, 20% for the property profits tax at resale). The result is shown in dirhams (MAD) with a US dollar equivalent (indicative rate, divide by 10).

Furnished rental: deductible charges under the real regime

For a property operated as a short-term let under the real net-profit regime, the deductible items typically include: maintenance and repair works; depreciation of the building and the furniture; insurance premiums; concierge and rental-management fees; booking-platform commissions; water, electricity and internet; the municipal services tax; accountancy fees; and loan interest linked to the acquisition. Keeping regular accounts is mandatory, but the effort is amply rewarded as soon as real charges exceed a few tens of thousands of dirhams a year, which is almost always the case for a riad or a villa with a pool let year-round. If you are weighing how to structure such a project, our guide on how to succeed in rental property investment in Marrakech sets out the wider picture.

Checklist: building an unassailable works file

To make sure your works are accepted, we recommend the following discipline: obtain a detailed quote and then a final invoice for each batch of works; check that the invoice shows the contractor’s tax identifier, ICE number and trade registration; pay by bank transfer rather than in cash; keep the bank statements proving payment; and store quotes, invoices and proof of payment together for each project. The most costly mistakes are paying in cash with no proper invoice, using an unregistered contractor, mixing personal décor with deductible renovation, and, above all, failing to keep the paperwork until the day of resale, when it is needed most. Before committing capital, it also helps to understand the market as a whole; see our guide on why and how to invest in Marrakech as a foreigner.

The mistakes that cost the most

Beyond the paperwork, three strategic errors recur. The first is assuming that works are deductible in a bare rental, they are not, and counting on a deduction that does not exist can distort an entire investment plan. The second is neglecting the resale dimension: an owner focused only on annual rents may discard invoices that would have been worth tens of thousands of dirhams in reduced TPI years later. The third is treating tax planning as an afterthought. The most efficient investors decide their rental regime and their documentation routine before the first renovation, not after, so that every dirham spent is captured in the right place. A short conversation with a Moroccan accountant at the outset usually pays for itself many times over.

Choosing the right regime from the outset

Because the three regimes treat works so differently, the most consequential decision an owner makes is often the choice of rental model itself. A property let bare offers simplicity but no deduction for renovation against rents; a furnished or tourist let demands accounts but unlocks the deduction of real charges, including works, insurance, management fees and platform commissions. For a riad or a villa with a pool in Marrakech or Agadir, the arithmetic usually favours the furnished, actively managed route, and that decision is best made before any renovation begins, so the spending is captured in the right column from day one.

There is also a timing dimension that international owners frequently overlook. Works carried out early, when the property is being brought up to a rentable standard, can serve a double purpose: they improve the guest experience and the nightly rate today, and, if invoiced compliantly, they remain available to reduce the property profits tax at resale years later. In other words, a single well-documented renovation can pay you twice. The key is to treat documentation not as administrative friction but as a financial asset, filed and preserved as carefully as the title deed itself.

Finally, remember that Moroccan tax sits alongside your obligations at home. A British owner, for instance, may need to declare Moroccan rental income or a capital gain in the United Kingdom, with relief available under the relevant double-taxation arrangements. The interaction between the two systems is beyond the scope of this guide, but it is a reason to keep clean records and to take advice in both countries rather than relying on Moroccan paperwork alone.

Tax-deductible works and the international owner in Morocco

For a British or international owner, the Moroccan approach to works and taxes can feel unfamiliar at first. In much of Northern Europe, renovation costs flow almost automatically into a rental tax return; in Morocco, the benefit is real but conditional, hinging on the rental regime and on rigorous, locally compliant invoicing. There is also a cultural dimension to the renovation itself. A riad in the medina is not simply a building to be modernised; its zellige, its carved cedar and its tadelakt plaster are part of a living craft tradition, and works carried out by skilled local artisans both preserve that heritage and create the authentic atmosphere that guests travel to Morocco to experience. The owners who succeed treat tax efficiency and cultural respect as two sides of the same coin, documenting every invoice while entrusting the work to craftspeople who understand the place.

FAQ: works and taxes in Morocco

Can I deduct works from my rents in a bare rental?
No. Since the 2019 reform, works are no longer deductible from rental income in an unfurnished long-term rental.

Which works reduce tax at resale?
Genuine improvement and renovation works, waterproofing, structural repairs, bathrooms, the creation of a pool, provided they are invoiced by a registered company and paid by traceable means.

What supporting documents does the tax authority require?
A detailed invoice showing the contractor’s tax identifier, ICE number and trade registration, together with proof of payment by bank transfer.

What if I have no invoices?
At resale the law allows a lump-sum uplift of 15% of the purchase price in lieu of actual works, usually far less than real, documented renovation.

Is the real regime worth it for a furnished rental?
Usually yes. As soon as real charges exceed the simplified allowance, the real regime lowers the tax due, which is almost always the case for an actively let riad or villa.

Can a foreign owner benefit from these rules?
Yes. The rules apply to the property and the regime, not the owner’s nationality; a foreign owner has the same rights and obligations.

Can I pay a contractor in cash?
You can, but the works will generally not be accepted for tax purposes without a proper invoice and traceable payment, so it is strongly discouraged.

What is the TPI?
The property profits tax levied on the gain when you sell; qualifying works increase your acquisition price and so reduce the taxable profit.

Should I consult a professional?
Yes. Rules evolve and individual situations vary; a Moroccan accountant or the DGI can confirm what applies to you.

Conclusion

Used correctly, tax-deductible works are one of the most powerful levers available to a property owner in Morocco, but only if you match the spending to the right regime and document it impeccably. A furnished rental rewards real, well-kept accounts; a resale rewards a complete file of compliant invoices; a bare rental, since 2019, rewards neither. With more than 25 years of expertise, Armonia Solutions helps owners in Marrakech and Agadir structure their rental and their renovations so that every dirham spent works as hard as possible. Contact our team to review your project and put the right documentation in place from the start.

Sources and references

Direction Générale des Impôts (DGI), Morocco; Moroccan Finance Law provisions on property profits tax (TPI) and the 2019 rental-income reform; Armonia Solutions field expertise in property and rental management in Marrakech and Agadir (more than 25 years). Figures are indicative for 2026, expressed in MAD with US dollar equivalents for guidance. This article is general information and not personalised tax advice.