This year's Finance Act envisions new measure to boost affordable housing in Morocco. People, however, are unsure about its success.
Morocco aims to enhance the provision of social housing and restore dynamism in the sector with the new measures included in the 2011 Finance Act, Housing Minister Ahmed Taoufiq Hejira announced earlier this week.
The law, adopted at the end of December, created a series of tax exoneration measures to spur affordable housing. These measures continue along the trend of the re-launch plan approved in Morocco's 2010 Finance Act, which runs over a period of ten years.
The government is looking to give the sector a boost, in the hope of remedying the effects of the world economic crisis, Hejira told Le Matin on Sunday (January 9th).
Under the new act, 70% of affordable housing projects will be transferred to small and medium-sized businesses, covering both urban and rural areas. Property developers will benefit from considerable tax exemptions, which will be conditional upon the quality and safety of the building work. The maximum price of social housing will be set at 290,000 dirhams, including tax, of which the state will contribute 40,000 dirhams.
Furthermore, 2011 will see the re-launch of affordable housing programmes targeting the middle class, with a series of measures promoting the creation of housing associations.
The plan also offers tax advantages to developers involved in the housing market, particularly exemptions from corporation tax, income tax, registration duties and special taxes on cement.
Those working in the sector are underwhelmed. The problem of social housing in Morocco requires an over-arching vision which goes beyond just the fiscal or legal aspects, they complained.
Jaâfar Ammari, a young property developer in Casablanca, said that the new tax measures, which were already included in the 2010 finance bill, have not been met with the popular success that both sides had hoped for.
"The speed of development of affordable housing has slowed a great deal, particularly due to the scarcity and cost of building land, which is the main problem," said Houcine, a member of the National Federation of Property Developers (FNPI).
"Likewise, the slow workings of the urban agency still cannot keep up with the speed of affordable housing development. It must start with processing social housing applications in a particular manner, because this is simply a national project with strategic socio-economic ramifications for the whole Kingdom," he said.
However, the cancellation back in 2008 of Morocco's tax exemptions benefiting developers in the affordable housing sector practically brought it to a standstill.
In the Kingdom, the bulk of social housing is concentrated along the Kenitra-Casablanca-El Jadida axis, covering 60% of needs. Casablanca alone accounts for 40% of needs in this area.
Roughly 70% of Moroccans are affected by the provision of social housing. In Casablanca, three areas have been chosen for development in the sector: Errahma, Zenata and Lahraouiyyine. The first properties are expected to be handed over by the end of 2011.
© Magharebia.com 2011
