Land profits: A hindrance to the real estate market
The measure provided for by the Draft Budget Bill relating to a request for a prior opinion before the conclusion of a real estate transaction has given rise to certain comments from professionals, in particular a chartered accountant and a notary public, starting with the schedule underpinned by this measure. Indeed, the request for the prior opinion, between the date of its dispatch and the receipt of the response from the administration, takes a period of 90 days in all.
During this period, the seller is likely to lose the opportunity to sell a property, especially in times of crisis and poor sales, and in 90 days, a potential buyer has plenty of time to change their mind. “This new procedure may significantly slow down the completion of real estate transactions by adding to the slump that the real estate market has been experiencing for several years, even more than a decade”, explains an accountant. “What if the compromise is established for a long period which could impact the sale price in recession or fluctuation after an opinion is received from the administration?”, asks a notary public. The latter also specifies that the response within two months is detrimental to the interests of taxpayers. Therefore, it is desirable to reduce it to less than a month. This system could also disrupt the secondary real estate market and prevent it from being regulated by the free play of supply and demand. The fact that the administration could rely on information in its possession to correct the price of a sale would be likely to pose some implementation problems since the real estate reference schedule has been suspended for an indefinite period. Furthermore, the chartered accountant points out that the institution, through the deposit of part of the sale price, denotes a form of presumption of tax evasion and infringes the right to benefit from the fruits of the property. For a notary public based in Casablanca, “the provision is very restrictive for the seller. The Directorate-General of Taxes (DGI) has other ways to compel taxpayers to pay their taxes and duties. The classic revision or rectification procedure is a commendable procedure, allowing taxpayers to defend themselves before the local and national commission and even before the Moroccan courts. We must not suffocate the citizen especially in this period of unprecedented economic crisis”.
Hassan EL ARIF
