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Morocco - My Next Target


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I have read on other forums that there is new legislation stating that there is no Vat payable on new build completed after 2007.

with LJDF prices where given to include vat and given that the properties will not be built untill 2008 does this mean that the prices should now be given taking the VAT Off ?????

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Hi Lina, I hadn't heard of this. I wouldn't have thought that there was the need for the Government to do this to encourage more investment, but will be very pleased if it reduces the price we have to pay and increases demand further.

From looking at other websites it would appear that nobody has had this information from source (allegedly Price Waterhouse.) Interested to hear what Andy Wellard has heard on this.

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Hi Lina, I hadn't heard of this. I wouldn't have thought that there was the need for the Government to do this to encourage more investment, but will be very pleased if it reduces the price we have to pay and increases demand further.

From looking at other websites it would appear that nobody has had this information from source (allegedly Price Waterhouse.) Interested to hear what Andy Wellard has heard on this.

I am sure a lot of people will be having interesting conversations with there agents on Monday.

Does any one know the amount they have added in for Vat.

Also i have a small investment property in Birmingham. it is currently rented out and the morgate payments are covered . should i consider selling this and buying on one of the future projects on morocco and if so which ones should i wait for?

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Hi Lina, I hadn't heard of this. I wouldn't have thought that there was the need for the Government to do this to encourage more investment, but will be very pleased if it reduces the price we have to pay and increases demand further.

From looking at other websites it would appear that nobody has had this information from source (allegedly Price Waterhouse.) Interested to hear what Andy Wellard has heard on this.

Soup,

Have just got off the phone to Andy, and he has asked me to post that his internet is out and as soon as he is back up and running he will convey his thoughts on the matter. I too am interested in implications, I would also be interested in anything people know on the matter.

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Hi phatpawz

I've gone for a villa in LJDF, so much of what I inserted won't be appropriate for you. (I will list it though.) Like others on here and other forums, I failed to get anything relating to government guarantee or 10 year building guarantee. My solicitor (CBA Law) informed me the latter shouldn't be an issue as all new builds in Saidia (and presumably other developments elsewhere) come with 10 year guarantee.

I'm afraid I'll hold one clause back from list as if event X happens I will have a reduction on purchase price, but if lots of people included this claause event X would be less likely to happen. Sorry about that, I know I may come in for stick from others, but just protecting my interests. I will add that that clause would only be of use if you were considering a villa.

From memeory, clauses were:

1) All permissions must be in place before work commences and next 20% installment is due. (Contracts for villas don't include this, they simply say next 20% due when construction has started.)

2) Pool to be a minimum of 21m2.

3) Small wall, approx. 1m high, with flowers on top to divide property from others and provide some privacy.

4) Stipulating upstairs room was to be a 3rd bedroom and furnished accordingly. (Plan in contract appendice had this as an office when it should be an en-suite bedroom.)

5) Property Logic to provide me with access to property 2 or 3 days before completion so I can check everything is in order. Outstanding 60% not to be paid till I'm happy. (With buying property in UK we can construct a snagging list after completing. This isn't the case in Morocco.)

6) Had refundable deposit taken off first 20% installment. Not everyone has done this. I've read on one or two other forums about some people not being able to do this.

Property Logic have been very reasonable throughout the negotiating period. The only condition above where I asked for something different was number 3. I asked for a hedge. The wording they have used in contract leads me to believe that everyone buying villa in LJDF will have small wall with flowers ont top separating their property from those it neighbours.

Probably as important as any clause is managing your solicitors. If they are on fixed fee they might be happy to run with contract as Property Logic provide it and not inform you of clauses they feel you should add. This was the case for me. My experience of solicitors is that they will let you fall to bottom of their list if you don't keep in regular contact with them.

In my eyes the main risks to my investment are the stability of Morocco and Property Logic. I'm comfortable enough with those and managed to nail down other smaller concerns through clauses in contract.

Hi

I have been following this thread with some interest, thank you for all your informative posts on Morocco, I have purchased a villa on the LJDF, It would be really useful if you could let me know what solicitors you have used, I have been recommended Legalex but would like to see what other options there are before signing up with them.

Thank you

Edited by atlantis
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Hi Atlantis

I've also bought a villa on LJDF. Several people, myself included, have used cba law. They do a contract check for £350 (which should by now be very straightforward for them) or the whole service for £1000. I was quoted 1% so went for a contract check only. Other people seem only to have to pay the £1000.

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Hi Atlantis

I've also bought a villa on LJDF. Several people, myself included, have used cba law. They do a contract check for £350 (which should by now be very straightforward for them) or the whole service for £1000. I was quoted 1% so went for a contract check only. Other people seem only to have to pay the £1000.

Hi

Thanks for that, seems alot cheaper than I have been quoted, could you mail me CBA email please, I would really appreciate it, We are out of the country tommorow, no not Morocco, Cyprus, so any info would be appreciated

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You may wish to look at:

www.playavistaonline.co.uk

Re CBA law as there is some information about buying property in Morocco on that site.

From what I can tell I think CBA law acted very responsibly in relation the mess that was/is Playa Vista.

Edited by BrickingIt
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Soup,

Have just got off the phone to Andy, and he has asked me to post that his internet is out and as soon as he is back up and running he will convey his thoughts on the matter. I too am interested in implications, I would also be interested in anything people know on the matter.

Hi Everyone,

Ok VAT in Morocco is a subject that I will be the first to admit is not my best subject, and I have seen lots of various postings on the subject saying that you have to pay it, you don't have to pay it and so on and so on.

If you take Saidia as an example Fadesa and Tasa promoted their prices and then added 14% VAT where as JDF and Oasis prices were inclusive of 14% VAT. If VAT was something that didn't apply to off plan property in Morocco then I am sure that as Saidia is the Kings and the Governments main focus at the moment it would have been bought up by now.

I have heard that there is possibly something going through that could reduce or take VAT off New Build properties.......I take this as exactly that, a possibility.

Until this becomes fact then everyone should understand that they are paying VAT, even on the Fadesa Kabila project the prices are inclusive of 14% VAT.

Lets say as an example that something is put in place for 1st of June 2007 and from that point there is no VAT on off plan property in Morocco.

a) Would this then apply to people who have purchased in 2005 / 2006 but don't complete until after this date?

B) Would this then be calculated and taken away from the final 60% that the client has to pay?

c) How will it effect prices?

d) Will someone who buys on the 1st of June 2007 in effect be getting the property at the prices someone purchased for in mid 2006?

This is all speculation but I am sure these are the sort of things you are asking yourself now.

My advice would be this.

At this moment in time you should be aware that there is 14% VAT in the prices. If anything happens in the future that changes this then you will have to wait until you know the facts and how it will effect you. If you get anything back then see it as a bonus.

The one thing that I will add is that I cant see anyone getting property in Morocco for a price that is less than what you are paying now.

Hope this helps,

Andy

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This VAT is a confusing subject and I feel Andy is right when he says we should assume final purchase price is price we have already agreed.

My understanding of VAT situation is that VAT payable on new build only applies to the developers, though VAT is effectively passed on to buyer through purchase price. Therefore, even if VAT were to be waived for new build completing after 2007 we may find that it is the developer and not us that benefits.

Atlantis: As others have said, CBA Law are good if you want to keep costs down. I've gone with £1k flat fee over simple report for extra peace of mind. I've had their report and don't think it was worth the £350 - Property Logic's English translation of contract was accurate and report didn't throw up anything that I hadn't already thought of. Where is your villa? I'm 2nd line in phase 3, facing East.

Edited by The Soup Dragon
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Atlantis,

I've used Legalex, but since I engaged them at 1%, I've heard they've got much more expensive.

Report on the contract was nothing - as there was a PL English version as Soup D says which is generic - can send you a copy if you haven't got one.

All in all, I think the laywers have got an easy job for their money (to date), although they will arrange for electricity / gas / bills etc to be settled on the completion of the contract.

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I read on another board some time ago that LJDF villas will be flankd by 1st and 18th holes of one of the courses. Has anyone else heard this? I'm keen to know where club house will be. The closer the better.

Hi Soup

I have just phoned Property Logic to see if i can find out for you. It shouldnt be to hard as they have started to move the earth and create the water hazards on that golf course, plus they have also put in markers as to where the holes are going to be.

They said they will get back to me but failing that i will be there again on the 1st of september.

Andy

dis_foto_75_01_1_.jpg

I read on another board some time ago that LJDF villas will be flankd by 1st and 18th holes of one of the courses. Has anyone else heard this? I'm keen to know where club house will be. The closer the better.

Hi Soup,

This is even quicker. Take a look at the picture attached, i got this from the following link

http://www.segalesgolf.net/disenyo.php?lang=eng&id=75

Andy

post-5014-1156267108_thumb.jpg

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Thanks Andy & fws.

I suspect the link to golf course design doesn't have holes ordered correctly as detailed Saidia Phase 2 site plan Andy has E-mailed me has one club house for both non championship courses between VVT9 and VVT11. That plan has 1st and 18th holes of both courses next to club house, so seems logical that it will service both.

(Graphics from Segalegolf site have 1st and 18th holes of closest course next to ZV7, but there is no club house here, just a maintenance building.)

Would have been a bonus had the club house been nearer.

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  • 2 weeks later...

Atlantis,

I've used Legalex, but since I engaged them at 1%, I've heard they've got much more expensive.

Report on the contract was nothing - as there was a PL English version as Soup D says which is generic - can send you a copy if you haven't got one.

All in all, I think the laywers have got an easy job for their money (to date), although they will arrange for electricity / gas / bills etc to be settled on the completion of the contract.

Hi Scotty,

Thanks for the info, I have contacted CBA for a quote, If you could you could send me a copy of the contract I would really appreciate it. I have entered my private mail address in the members section, but you have difficulty let me know and I can give you my contact details.,Thanks very much, We have reserved in LJDF Villa second line.

Hi BrickingIT

Great name, thanks for playavistaonline, seems like they encountered a bit of trouble, very useful as I have not come across this site.

Soup/Fws

Thanks for CBS mail, I have contacted them and asked for a quote, will take on board what you said about the contract deal, especially if its a generic one.

Atlantis

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Hi Dogbox

I plan to visit Berlin next month in search of property.

I am interested in commercial (shops) , apartment block or like you land with planning....

1) Any advise

2) Can you provide good contacts / agents.

Thanks

SUN

If you PM me with your email details I will pass them to my agent in Berlin. I found her very efficient and honest.

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Hi Atlantis. Which villa type have you opted for and which phase are you in?

If you don't get CBA Law's report on contract from Scotty soon let me know as me able to mail you.

Hi Soupdragon

Have gone for the Hibiscus on Phase 1 second line, thanks for the offer of report on contract will let you know if I need it,

Regards

Atlantis

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Hi All,

This is my first time post and first time venture into the world of overseas property investment.

I'm looking to buy an appartment in JDF and wold like to know your thoughts on desirability of a ground floor appartment as opposed to a first floor one.

Also, it seems that potentially we would be paying over 50% of rental in tax. Please see the following:

http://www.propertyshowrooms.com/morocco/p...ax-planning.asp

30% property tax

13.5% property rental tax

10% garbage collection tax (after 5 years)

.... is this correct?

I know in life nothing is certain, but this development does seem to have a lot going for it. I'm hoping that there will be at least 15% capital growth sustainable for 4 years. Any thoughts?

Thanks.

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Welcome Digs

The 30% property tax doesn't count for the first five years. Don't think our rental is taxed in Morocco either for first few years, though makes little difference as will still be taxed in UK.

I'd probably go for a ground floor over a first floor unless the extra height makes a difference for views or flat faces the street. Ground floors should be cooler in the summer (OK not a biggie given comes with air conditioning) and you have garden or terrace area that is larger than terrace for 1st floors.

I'd say 15% house price inflation is a conservative estimate, though its a good idea to manage expectations with mind set of just looking for that return. We have been seeing arround 2% per month for some time. If that continues then we'll see roughtly 25% p.a.

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Perhaps someone can clarify the "property rental tax" element.

My understanding is that this is payable,irrespective of whether or not the property is rented

From my perspective this would be disappointing news as i would have to pay 13.5% of something that i was not even receiving.

On a property which cost 250,000 euros, rental potential valued at say,8% that is 2,700 euros every year,

Is this correct? <_

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Perhaps someone can clarify the "property rental tax" element.

My understanding is that this is payable,irrespective of whether or not the property is rented

From my perspective this would be disappointing news as i would have to pay 13.5% of something that i was not even receiving.

On a property which cost 250,000 euros, rental potential valued at say,8% that is 2,700 euros every year,

Is this correct? <_

Hi Soup, Magnate and Digs,

Digs - The information that you have seen on our website is a rough guide and you should always get professional advice on tax issues.

Soup and Magnate - I know that Soup is using CBA Law and we have started to recommend this company to our clients that are buying in Morocco. I spoke with Ross Coates last week and they have a new lawyer that is from the Tetouan area starting tomorrow who can also advise on Tax implications.

You may have noticed that there are more apartments showing as available on the JDF website, this is due to Property Logic having a clean up on clients that have had reservations placed for long periods of time but have not gone to private purchase contract.

Digs - I would look at the ground floor units in Block 11 - They are West facing and also close to the pool and Club House. I still prefer the RT7 plot more than RT2. The apartments are bigger, They are more central within the resort, They are closer to the Marina, and they are cheaper. Also they are within phase 2 of the development so they will complete later than RT2.

I also spoke with Superior yesterday (Oasis Beach and Golf) who have told me that they have purchased one of the locals within the Commercial center which they will be using for onsite rentals and resale's.

Regards,

Andy Welland

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  • 2 weeks later...

Hi Atlantis. Which villa type have you opted for and which phase are you in?

If you don't get CBA Law's report on contract from Scotty soon let me know as me able to mail you.

I have reserved front line on phase. Would you be able to send me the CBA Law's report

mmv

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