Rental Income Tax in Morocco: What You Should Know
Rental income tax in Morocco is one of the first things any landlord, property investor or expatriate should master before signing a lease or listing an apartment on Airbnb. The rules changed meaningfully with the 2025 Finance Law (Loi de finances n° 60-24), which raised the tax-free threshold, lowered the top marginal rate and introduced a new optional flat rate for higher rents. Whether you own a single riad in Marrakech, a sea-view flat in Agadir or a portfolio of short-term rentals along Taghazout bay, understanding how the tax is computed will help you keep more of your income and stay compliant.
This guide explains, in plain English, who is liable, how the tax is calculated in 2025, which regime to choose, what you can deduct, and how withholding at source works. You will find four reference tables, a fully worked case study, a step-by-step self-calculation worksheet, a compliance checklist and a detailed FAQ. Figures are based on the Moroccan General Tax Code (CGI) as amended for 2025; because tax rules evolve every year, always confirm the current position with the Direction Générale des Impôts (tax.gov.ma) or a licensed Moroccan accountant before filing.
Who has to pay rental income tax in Morocco?
In Morocco, income from renting out built or unbuilt property is classified as revenus fonciers (land/property income) and is subject to the personal income tax, the Impôt sur le Revenu (IR). The rules apply to residents and non-residents alike: what matters is that the property is located in Morocco. A French or British expatriate who owns a Marrakech apartment and rents it out is liable for Moroccan rental income tax on that rent, regardless of where they live, although double-taxation treaties may then provide relief in their country of residence.
Liability covers long-term residential leases, commercial leases, rented land, and — under specific conditions — furnished and short-term holiday rentals. The distinction between a passive property rental and a genuine commercial accommodation business matters a great deal, because it changes the tax category, the rate and the paperwork. We return to short-term and Airbnb rentals in a dedicated section below.
How rental income tax is calculated in 2025
There are now three ways your rental income can be taxed in Morocco. Choosing the right one is the single biggest lever a landlord has over the final bill.
1. The normal progressive regime (with the 40% allowance)
Under the standard regime, you declare your gross annual rent, apply a flat 40% allowance for charges and depreciation, and the remaining 60% is added to your other income and taxed according to the progressive IR scale. This regime is usually the most favourable for modest rents, because the first 40,000 MAD of taxable income is exempt and the lower brackets are taxed lightly. The 40% allowance is automatic — you do not need to keep receipts to claim it.
2. Withholding at source (retenue à la source)
Since 2019, and refined for 2025, tenants who are companies or professionals on a real/simplified accounting regime must withhold the tax at source when they pay rent, then remit it to the Treasury. The withholding brackets for 2025 are based on the gross annual rent paid to the landlord:
| Gross annual rent (MAD) | Withholding rate (RAS) 2025 | Nature |
|---|---|---|
| Up to 40,000 | 0% | Exempt at source |
| 40,001 to 119,999 | 10% | Advance / non-final by default |
| 120,000 and above | 15% | Advance / non-final by default |
When the tenant is a private individual who does not keep professional accounts (the typical residential lease), there is no withholding and the landlord simply declares and pays directly. Withholding only applies where a company or accounting professional is the tenant.
3. The new 20% flat (libératoire) option — introduced in 2025
The 2025 Finance Law created an optional flat, final rate of 20% for landlords whose gross annual rent reaches 120,000 MAD or more. Choosing this option means the 20% is final (libératoire): you pay it and you are released from including that rent in your annual global income declaration, which considerably simplifies life for higher-income landlords. The trade-off is that you give up the 40% allowance and the progressive brackets, so the flat option only makes sense above a certain income level. We compare the two regimes numerically further down.
The 2025 progressive income tax (IR) scale
When your rental income is taxed under the normal regime, the taxable base (after the 40% allowance and any other reliefs) is combined with your other income and run through the progressive scale. The 2025 Finance Law widened the brackets and cut rates — most notably raising the exempt band from 30,000 to 40,000 MAD and lowering the top rate from 38% to 37%:
| Annual taxable income (MAD) | 2025 IR rate |
|---|---|
| 0 to 40,000 | 0% |
| 40,001 to 60,000 | 10% |
| 60,001 to 80,000 | 20% |
| 80,001 to 100,000 | 30% |
| 100,001 to 180,000 | 34% |
| Above 180,000 | 37% |
Because the scale is marginal, only the slice of income that falls inside each band is taxed at that band’s rate. A landlord is never pushed into a worse overall position by earning one dirham more.
Furnished and short-term (Airbnb) rentals: a special case
Short-term holiday letting — the core of the Marrakech and Agadir tourism economy — sits in a grey zone between passive property income and a commercial accommodation business. Where the activity is occasional and the property is simply let furnished, it can still be treated as revenus fonciers. But once the letting becomes habitual, with hotel-like services (cleaning, linen, welcome, concierge), the tax authorities can reclassify it as a professional commercial activity. In that case it falls under professional income rules — typically the Contribution Professionnelle Unique (CPU) for small operators, or the net-result regime for larger ones — and may also trigger VAT (10% for tourist accommodation services) and a professional tax (taxe professionnelle).
For most individual Airbnb hosts running one or two units, the practical questions are: am I crossing into professional status, should I register, and which regime minimises my total burden? Because the line is fact-specific, this is exactly the kind of situation where a short consultation with a Moroccan accountant — or with a managed-rental specialist such as Armonia Solutions — pays for itself.
Deductions, exemptions and special considerations
Several reliefs can reduce your rental tax bill in Morocco. The flat 40% allowance under the normal regime is the headline one. Beyond that, the most useful exemptions and rules to know are:
| Relief / rule | What it means in practice |
|---|---|
| 40,000 MAD exempt band | Low total rents may fall entirely within the 0% band, producing no tax. |
| 40% standard allowance | Automatic deduction for charges and depreciation under the normal regime; no receipts required. |
| Withholding as a credit | Tax withheld by a corporate tenant is, by default, an advance offset against your final IR — it is not lost. |
| 20% flat option | Final and declaration-free for rents of 120,000 MAD or more; trades the allowance for simplicity. |
| Double-tax treaties | Non-residents may obtain relief in their home country for tax already paid in Morocco. |
One frequent mistake is forgetting that the withheld tax is recoverable. Landlords who let to a company sometimes assume the 10% or 15% taken at source is the end of the story; in the normal regime it is an advance, and filing the annual return can produce a refund if the progressive calculation comes out lower.
Worked case study: a Marrakech apartment
Consider Sophie, a British expatriate who owns a furnished two-bedroom apartment in the Guéliz district of Marrakech and rents it on a 12-month residential lease to a private tenant for 8,000 MAD per month — 96,000 MAD gross per year. Her tenant is an individual, so there is no withholding; Sophie declares and pays directly.
Normal regime. Gross rent 96,000 MAD, minus the 40% allowance (38,400 MAD), leaves a taxable base of 57,600 MAD. Assuming this is her only Moroccan income, the 2025 scale applies: the first 40,000 MAD is taxed at 0%, and the remaining 17,600 MAD falls in the 10% band, giving roughly 1,760 MAD of tax for the year — an effective rate under 2% of gross rent.
Flat 20% option. Because her rent is below 120,000 MAD, Sophie is not eligible for the 20% flat option anyway — and even if she were, 20% of 96,000 MAD would be 19,200 MAD, vastly more than the normal regime produces. The lesson is clear: for modest rents, the progressive regime with the 40% allowance is overwhelmingly the better choice. The flat option only becomes competitive for high earners who would otherwise sit deep in the 34% and 37% brackets.
Mini rental-tax simulator (self-calculation worksheet)
Use this five-step worksheet to estimate your own 2025 rental tax under the normal regime. Work in Moroccan dirham (MAD) and round at the end.
| Step | Action | Your figure |
|---|---|---|
| 1 | Add up your gross annual rent (monthly rent × 12) | ________ MAD |
| 2 | Multiply by 0.60 (this applies the 40% allowance) | ________ MAD |
| 3 | This is your taxable base — add any other taxable income | ________ MAD |
| 4 | Apply the 2025 IR scale band by band (0% up to 40,000, then 10%, 20%…) | ________ MAD |
| 5 | Subtract any tax already withheld at source by a corporate tenant | ________ MAD due |
If your gross rent is 120,000 MAD or more, run the same calculation twice — once under the normal regime above, once as a flat 20% of gross rent — and keep whichever is lower. For most landlords below roughly 250,000–300,000 MAD of annual rent, the normal regime wins; above that, the 20% flat option becomes attractive and also removes the annual declaration burden.
Comparative table: which regime suits you?
| Criterion | Normal progressive regime | 20% flat (libératoire) option |
|---|---|---|
| Who it suits | Most landlords, especially modest rents | High rents (typically 120,000 MAD+) |
| 40% allowance | Yes | No |
| Exempt 40,000 band | Yes | No |
| Annual global declaration | Required | Not required (final) |
| Effective rate on modest rent | Often under 5% | Flat 20% — usually too high |
| Best for | Optimising the bill | Simplicity at high income |
Compliance checklist and tools
To stay on the right side of the Moroccan tax authority and avoid penalties, run through this checklist each year:
| Task | Why it matters |
|---|---|
| Keep a copy of every lease and rent receipt | Proof of gross rent and start dates in case of audit |
| Confirm whether your tenant must withhold | Avoids double-paying or under-declaring |
| File the annual IR return on time | Late filing triggers surcharges and interest |
| Decide your regime before filing | The 20% option must be elected, not assumed |
| Reassess short-term lets each year | Habitual Airbnb activity can become professional |
| Check the current rules on tax.gov.ma | Rates and thresholds change with each Finance Law |
Useful tools include the online services of the DGI portal for declarations and payments, a simple spreadsheet to track monthly rent and withholding, and — for owners who would rather not deal with any of it — a full-service manager who handles leasing, compliance and reporting on their behalf.
From the field: what landlords in Marrakech and Agadir tell us
In day-to-day practice managing rentals across Marrakech, Agadir and Taghazout, the same patterns come up again and again. Owners are routinely surprised that the effective tax on a typical long-term lease is far lower than they feared — the 40% allowance combined with the 40,000 MAD exempt band means many modest rentals attract only a token bill. Conversely, short-term hosts are often unaware that scaling up to several units with hotel-style services can quietly push them into professional status, with VAT and professional tax attached.
The most expensive mistakes we see are not aggressive tax planning gone wrong — they are simple omissions: not filing at all, ignoring a corporate tenant’s withholding obligation, or failing to reclaim tax that had already been withheld. Good record-keeping and a yearly ten-minute review of which regime applies almost always prevent them. For a wider view of property-related levies, our guide to real estate tax in Morocco and our overview of housing tax in Morocco are useful companions to this article.
Frequently asked questions
1. Do non-residents pay rental income tax in Morocco?
Yes. Tax follows the location of the property, so any rent from a Moroccan property is taxable in Morocco even if the owner lives abroad. Double-tax treaties may then relieve the income in the owner’s home country.
2. What is the rental income tax rate in Morocco in 2025?
Under the normal regime the taxable base (gross rent minus the 40% allowance) is taxed on the progressive IR scale from 0% to 37%. A flat 20% final option exists for gross rents of 120,000 MAD or more.
3. Is there a tax-free amount?
Yes. The 2025 scale exempts the first 40,000 MAD of taxable income, and a 40% allowance reduces gross rent before the scale is applied, so many small rentals pay little or nothing.
4. What is the withholding (retenue à la source) on rent?
When the tenant is a company or an accounting professional, they withhold 0% up to 40,000 MAD of annual rent, 10% up to 120,000 MAD, and 15% at 120,000 MAD or more, then remit it to the Treasury.
5. Is the withheld tax final?
By default no — in the normal regime it is an advance you offset against your final IR, and it can produce a refund. Only the elected 20% flat option is final and declaration-free.
6. How is Airbnb income taxed?
Occasional furnished letting can be treated as property income, but habitual short-term letting with services can be reclassified as a professional activity, bringing CPU or net-result taxation, possible 10% VAT and professional tax.
7. Can I deduct actual expenses instead of the 40% allowance?
The normal regime gives an automatic 40% allowance rather than itemised expenses. Operators taxed as a professional activity follow different, expense-based rules.
8. When do I file?
The annual income tax return is filed in the spring following the tax year. Filing late triggers surcharges and interest, so diarise the deadline each year.
9. Should I choose the 20% flat option?
Only if your gross rent is high — usually well above 120,000 MAD — so that the progressive scale would otherwise tax you in the 34% to 37% bands. For modest rents the normal regime is cheaper.
10. Where can I check the official rules?
The authoritative source is the Direction Générale des Impôts at tax.gov.ma, which publishes the General Tax Code and each year’s Finance Law.
Conclusion
Morocco’s 2025 reforms made rental income tax both lighter and more flexible: a larger exempt band, lower brackets, the familiar 40% allowance, and a new 20% flat option for high earners. For the great majority of landlords in Marrakech and Agadir, the normal progressive regime keeps the effective rate strikingly low — often a few percent of gross rent — provided the annual return is actually filed and any withholding is reclaimed. The keys are knowing your regime, keeping clean records, and reassessing short-term lets before they tip into professional status.
If you would rather spend your time on your property than on tax forms, Armonia Solutions manages Airbnb and long-term rentals across Marrakech, Agadir and Taghazout end to end — leasing, guest management, and the compliance and reporting that go with it. Get in touch for a free assessment of your rental and the regime that will leave the most in your pocket.
Sources
Direction Générale des Impôts (tax.gov.ma) — Moroccan General Tax Code (CGI) and Finance Law n° 60-24 for 2025; provisions on revenus fonciers, withholding at source, the 2025 IR scale and the optional 20% flat rate. This article is general information, updated for 2025, and not a substitute for personalised advice from a licensed Moroccan tax adviser.
