How does the 40% deduction on rental income work?

A flat 40% deduction is automatically applied to gross annual rent. The taxable base DGI retains is therefore 60% of gross. This deduction is meant to cover all your expenses without any documentation.

Which regime should I pick: standard or real?

The standard regime is simpler and better if your actual expenses come in under 40% of gross rent. The real regime pays off when you have a large mortgage (deductible interest) or high running costs. The calculator runs the comparison for you.

When does withholding tax apply?

RAS only applies when your tenant is a legal entity (company) or a taxable professional. With an individual tenant, you self-declare and pay your IR every year. No withholding up to 40 000 MAD a year, then 10% below 120 000 MAD and 15% from 120 000 MAD.

Is mortgage interest deductible?

Yes, but only under the real regime. The 'interest' portion of your mortgage payment is deductible from gross rent (the principal repayment is not). Keep your bank amortization table as proof.

When do I pay my rental IR?

The annual return is filed before March 1 of the following year (2026 income filed before March 1, 2027) on Simpl-IR. Payment is due by the end of March. If withholding has already been applied, you reconcile then.

Free · 2026 DGI tax brackets

Morocco Rental Income Tax Calculator 2026

Calculate your IR (income tax) on Moroccan rental income for 2026: official tax brackets, 40% standard deduction, withholding tax (RAS) and real-expenses regime with deductible charges.

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Your inputs

Rent input mode

Monthly rent (MAD)Tenant type

Tax regime

A flat 40% standard deduction is automatically applied to gross rent.

Standard vs Real regime

Tax under Standard

1.760 MADMore favorable

Tax under Real

10.800 MAD

Bracket-by-bracket detail (2026 IR scale)

0 to 40.000 MAD: 0%0 MAD
40.000 to 57.600 MAD: 10%1.760 MAD

What this calculator does

This tool calculates the income tax (IR) you owe on rental income in Morocco for 2026 using the official tax scale and the 40% standard deduction on rental income. It also handles withholding tax (RAS) when your tenant is a legal entity, and compares the standard regime against the real-expenses regime so you can pick the cheaper option.

The goal is a realistic tax provision to plug into your profitability models. Many Moroccan investors forget rental IR when they simulate ROI, which inflates their net yield by 5 to 15 points depending on the case. This calculator returns the exact number in seconds, with a bracket-by-bracket breakdown.

Standard regime: the 40% deduction explained

The standard regime is the default option for most individual landlords in Morocco. The administration applies an automatic 40% deduction on annual gross rent. This percentage is meant to cover all your expenses (maintenance, syndic, local tax, insurance, vacancy) without you needing to provide receipts.

Practically, if you collect 96 000 MAD of gross rent in a year, the taxable base retained by DGI is 96 000 × 60% = 57 600 MAD. That base then runs through the progressive IR scale. The standard regime is simple and favorable when your actual expenses come in under 40% of gross, which is the most common scenario.

Real regime: when it pays off

The real regime lets you deduct expenses you actually incurred instead of the flat 40%. It becomes more favorable in two typical cases: you carry a sizable mortgage (interest is deductible), or your running expenses (syndic, local tax, insurance, management) exceed 40% of gross rent.

The real regime requires tighter bookkeeping: keep every invoice and document (bank amortization table for interest, syndic receipts, insurance certificates). In a tax audit, DGI can demand proof of each deducted charge. Our calculator runs the Standard vs Real comparison automatically and flags the cheaper regime for your case.

2026 Morocco IR tax brackets

The 2026 IR scale is progressive: each slice of income is taxed only at its corresponding rate. The first slice (0 to 40 000 MAD) is at 0%, which effectively exempts many small landlords: after the 40% allowance, gross rent up to 66 667 MAD a year triggers no IR if it is your only income.

Subsequent brackets climb to 10%, 20%, 30%, 34% and 37% for the top slice (the 2025 Finance Law cut the marginal rate from 38% to 37%). If you also earn a salary, your rental IR stacks on top of your marginal salary bracket, which can push the effective rate higher. The calculator displays the bracket-level breakdown so you can see where each dirham of tax is going.

Withholding tax (RAS) on rent: company tenant

When your tenant is a legal entity (company, association, taxable professional), they are required to withhold a portion of each rent payment at source. The RAS is a prepayment of your annual IR, not a final tax: at year end, you reconcile via your tax return and recover any excess.

The RAS rate depends on annual rent: no withholding up to 40 000 MAD, 10% below 120 000 MAD, 15% from 120 000 MAD. The calculator applies the correct rate automatically based on your input and displays the final balance owed or refundable when you file, before 1 March N+1. Since 2025 you can also opt for a final 20% withholding, which replaces IR on those rents and removes them from your annual return.

Deductible expenses under the real regime

Under the real regime, the main deductible expenses are: mortgage interest (principal is excluded), syndic and co-ownership fees, local communal tax (TSC), insurance premiums for the property and for unpaid-rent coverage, property management fees (typically 8% to 12% of rent if you use an agency).

Routine maintenance and repair work is also deductible, but improvement or extension works that increase property value are not. Keep every invoice: DGI can audit back four years. To use these inputs, switch the regime to 'Real' in the calculator.

Morocco rental tax FAQ

What is the IR exemption threshold for rental income in 2026?: There is no exemption threshold specific to rent: the first bracket of the scale, 0% up to 40 000 MAD of net income, does the work. After the 40% allowance, gross rent up to 66 667 MAD a year triggers no IR if it is your only income. Since 2025, a company tenant withholds nothing while annual rent stays at or below 40 000 MAD. The annual return is still required.
How does the 40% deduction on rental income work?: A flat 40% deduction is automatically applied to gross annual rent. The taxable base DGI retains is therefore 60% of gross. This deduction is meant to cover all your expenses without any documentation.
Which regime should I pick: standard or real?: The standard regime is simpler and better if your actual expenses come in under 40% of gross rent. The real regime pays off when you have a large mortgage (deductible interest) or high running costs. The calculator runs the comparison for you.
When does withholding tax apply?: RAS only applies when your tenant is a legal entity (company) or a taxable professional. With an individual tenant, you self-declare and pay your IR every year. No withholding up to 40 000 MAD a year, then 10% below 120 000 MAD and 15% from 120 000 MAD.
Is mortgage interest deductible?: Yes, but only under the real regime. The 'interest' portion of your mortgage payment is deductible from gross rent (the principal repayment is not). Keep your bank amortization table as proof.
When do I pay my rental IR?: The annual return is filed before March 1 of the following year (2026 income filed before March 1, 2027) on Simpl-IR. Payment is due by the end of March. If withholding has already been applied, you reconcile then.