Morocco

Think Britons in Morocco and the image that has traditionally come to mind is of Sebastian Flyte, from Evelyn Waugh’s novel Brideshead Revisted, stumbling from one drinking den to another. Although still retaining many of the exotic charms that drew Flyte, Morocco has emerged in the last few years as a tempting destination for a very different kind of visitor: the property investor.

Despite its location on the north-western tip of Africa, Morocco has a climate, geography and history linked as much to Mediterranean Europe as to the rest of Africa. In the north, the fine beaches, lush highland valleys and evocative old cities reinforce this Mediterranean impression. But leave the coast behind and you are plunged into a different culture and a landscape with spectacular mountains and the empty wilderness of the Sahara. The average summer temperatures along the coast is 29C; the period between October and April is slightly cooler, providing welcome winter sun.

High profile figures such as Sir Richard Branson, the Rolling Stones and Malcolm Forbes have blazed the trail to Morocco, while other enterprising buyers started several years acquiring riads, traditional houses with interior gardens, in Marrakech (also written Marrakesh). The number of smart British estate agents that have set up shop in the city shows how foreign buying interest is growing. Casablanca, by contrast, has so far been considered too industrial, and Tangier too seedy, but they, too, may soon take off.

The focus is also turning towards both the Atlantic and Mediterranean coasts. The country’s property market is poised to enter a new phase with growing numbers of apartment and villa projects targeted directly at foreign buyers. Morocco is being portrayed as “the new Spain” – the climate is similar to the Costa del Sol, while price are only a third to a half those on the north side of the Straits of Gibraltar.

The boom is underpinned by a realisation by Moroccan authorities of the benefits of tourism. Under a strategy named “Vision 2010”, the government is building new roads, developing regional airports and creating six new coastal resorts, with the aim of creating 600,000 new jobs in the tourist industry and boosting visitor numbers from 2 million to 10 million a year by the beginning of the next decade. The strategy appears to be working: tourist numbers in the first seven months of 2005 were up 19% on the year before; the number of Britons rose 46%. A further boost is expected from the “open-skies” agreement which Morocco signed with the the European Union in December 2005, liberalises air travel between Europe and Morocco. The country already has its own low-cost carrier, Atlas Blue, which began flying to Gatwick and several other European airports in 2004; other low-cost airlines are expected to follow.

As part of its plans, the Moroccan government has come up with a series of tax concessions for foreign buyers: rent is tax free for the first five years; no capital gains tax is levied on profits under £40,000 (and it is set at 20% thereafter, dropping to zero after 10 years); the proceeds of sale can be repatriated to the UK; and there is no inheritance tax to pay if the property is passed on to another family member. Mortgages are also becoming available for foreigners - although not normally for more than 60% loan-to-value, with interest rates, at the time of writing, about 8%. The payment structures for off-plan developments are fairly advantageous and dovetail neatly with the mortgages; normally a maximum of 40% must be paid as an initial deposit and during the course of the construction, with the remainder due on completion.

In theory, buying procedure are simple and straightforward and similar to those in France, with all transactions overseen by notaires (notaries). Expect to pay about 2% of the purchase price to the notaire and a further 3-4% on land registration fees, stamp duties and other small expenses. You should not run into title problems when buying in new developments, but matters may become more complicated with second-hand property. Some old properties may simply not have been registered at all; inheritance rules, under which property is automatically shared between children, could complicate the process of securing the agreement of all the existing owners.

Morocco is a Muslim country and, despite the keenness of authorities to attract foreign investment, the threat of militant Islam is never far away. Morocco has also been a target for violence; in its case, a series of suicide bombing in Casablanca in May 2003 that killed 45 people. Although the country has appeared calm since, poverty and high unemployment providing a breeding ground for discontent among the young.

So where is best to buy?

If you want to know more, you’ve got to buy the book