Real estate developers want the government to introduce a new annual tax on owners who leave valuable land unused after zoning changes increase its value. The proposal comes as land prices continue to rise in big cities such as Casablanca, where developers say too much land is sitting idle instead of being used to build new homes.
The issue centres on changes to urban master plans. Areas once reserved for villas can now allow apartment buildings of four or five floors (R+4 or R+5). This increases the amount of housing that can be built on a plot by 300% to 500%.
Land values also rise sharply after these changes. In Casablanca neighbourhoods such as Maarif, Anfa, Gauthier and Val Fleuri, prices can reach between 20,000 and 35,000 dirhams ($2,100-$3,700) per square metre.
Many owners choose to keep their villas instead of selling or redeveloping them, hoping land prices will rise even further. Developers say this reduces the supply of land for new housing at a time when demand remains high.
More than 70% of central Casablanca’s potential residential development land is still occupied by low-density single-family homes, according to industry estimates.
Developers and officials from the Ministry of Economy and Finance are discussing a new annual fee for these properties. The proposal is based on the existing Tax on Unbuilt Land (Taxe sur les Terrains Non Bâtis), which aims to discourage land speculation.
Current tax rules do not apply to villas built on up-zoned land because the plots are already developed.
Law 14-25 sets the Tax on Unbuilt Land at between 15 and 30 dirhams per square metre a year in fully serviced urban areas. Casablanca expects to collect about 300 million dirhams a year from the tax using geospatial mapping by Casablanca Mawarid.
Owners also benefit from another tax advantage. They pay no tax on the increase in land value until they sell the property. A 20% property profit tax applies when a sale takes place, but owners are fully exempt if the property has been their main residence for more than five years.
Developers want the new annual fee to be based on the maximum building rights allowed under the new zoning rules rather than on the size of the existing building.
They believe this would encourage owners to sell their land or work with developers to build new housing, helping increase supply in cities where land is becoming harder to find.
Officials are still discussing how the tax would be calculated, collected and enforced. Current laws do not require owners to redevelop their properties after zoning changes, allowing many to hold on to valuable land for years while prices continue to rise.
