Casablanca – The real estate framework is set to return with a revamped, more transparent model that relies on independent market data rather than internal administrative assessments. This initiative aims to create a fairer system where taxpayers can propose prices based on verifiable market insights.

A shift toward transparency

The previous real estate framework faced criticism for being designed primarily by and for the tax administration, leading to concerns about fairness. The upcoming system will be market-driven, ensuring that any database used for valuation is neutral and independent. The goal is to allow property values to be determined based on objective, verifiable information rather than fixed administrative pricing.

The tax administration is carefully developing this project to ensure it aligns with principles of fairness and impartiality. Officials emphasize that while the transition is complex, the priority is to provide transparency and justice for all parties involved. If successful, this reform could bring the same level of reliability to real estate taxation as has been achieved in transfer pricing regulations.

Leveraging international data

To enhance the accuracy of valuations, the tax administration has recently subscribed to an international database that provides market comparables across various economic sectors. This ensures that real estate price assessments are not solely based on internal tax authority records, reducing the likelihood of arbitrary reassessments. Officials describe this as a significant step forward, reinforcing recent advancements in tax transparency.

Since 1992, Moroccan tax authorities have had the right to reassess real estate transactions due to widespread underreporting of property sale prices. Unlike other countries where real estate tax fraud is severely penalized, Morocco’s system bases its reassessments on the estimated market value of properties.

However, a key challenge remains: due to confidentiality rules, the tax administration cannot disclose past transaction data to justify price adjustments. “We cannot legally reveal a previous sale contract of a similar property to support a tax reassessment,” explained an official. To address this, the private sector is encouraged to develop an open-access database that all parties can consult, similar to existing frameworks for transfer pricing.

A more flexible and negotiable approach

One of the major changes in the new framework is its shift from rigid, fixed property valuations to a more flexible, contestable model. Taxpayers will have access to real estate price listings through an official platform, allowing them to present their own valuations when filing tax declarations. The tax administration will then have the option to accept or challenge these proposed values.

“This approach will establish a factual basis for discussion and significantly reduce disputes between taxpayers and tax authorities,” stated a senior tax official.