Social housing fraud: Administrative qualification networks under increased scrutiny

The misuse of administrative certificates, especially those related to social housing, has become a worrying practice in Morocco. Fraudulent networks take advantage of loopholes in the system to obtain certificates of occupancy under false pretenses, thus enabling the construction of state mortgages on these homes. This fraud is often motivated by significant financial profits associated with the sale or rental of these subsidized housing units.

The relevant certificates, such as residency certificates, are essential in order for the ” released » of the state mortgage on social housing. This certificate confirms that the applicant has used the property as their main residence for four years. However, fraudulent networks take advantage of the increase in demand during periods of high migration, especially in the summer when MREs return to school, to increase the costs of these certificates to exorbitant prices, often over above 3,000 dirhams.

According to informed sources, the Interior Ministry has intensified its efforts to combat these illegal practices. Instructions were given to local authorities and heads of administrative services to strengthen control over the issuing of these certificates.

Regulators and senior officials were put in place to monitor and verify the procedures for obtaining the certificates necessary for the application for ” released » on social housing. This control aims to ensure that procedures meet the conditions required by the current hybrid support system, which combines the old exemption from VAT with the new direct housing support.

Fraudulent networks, made up of intermediaries and brokers, and sometimes involving civil servants, take advantage of a major loophole: users’ national identity cards do not contain information about the address of the relevant accommodation. Using this loophole, they force applicants to pay large sums of money to obtain the necessary certificates, sources explain. Hespress.

The law states that recipients of state aid may not have any other accommodation registered in their name. They must provide proof of this position. In addition, social housing buyers benefiting from VAT exemption can only resell their property after four years and only after receiving the certificate from ” released » from the tax administration. Any breach of these terms will result in an obligation to pay exempt VAT, as well as late payment penalties and recovery charges. In addition, the property must be reserved for primary residence and cannot be rented or used for other purposes, under penalty of losing the privileges granted.

The Ministry of the Interior linked the new measure to the increase in the number of people involved in the fraudulent trade in state-subsidized social housing. These people buy apartments for rent or use them as second homes, especially in cities on the coast.

Fraudulent practices are mainly aimed at benefiting from tax exemptions provided by the government in relation to VAT. Beneficiaries of housing assistance, after four years, use brokers to obtain residence certificates confirming that they have actually lived in the apartments acquired as part of social housing projects.

At the same time as increased efforts to monitor administrative certificates, the Directorate General of Taxes (DGI) has strengthened its controls to verify the documents submitted for certificates ” released“, especially in popular coastal areas in summer. Many people buy apartments in these areas to rent in the summer and must obtain certificates of occupancy at all costs, often through broker networks.

It is important to remember that owners of social housing that benefit from exemption from VAT must apply to the registration department of the competent tax authority after four years from the purchase in order to raise the mortgage on the property’s land registration. This request must be accompanied by copies of the sales contract, the national identity card with the address of the residence or an administrative certificate confirming the length of residence in the apartment, as well as payment receipts for the collection services.