fraud

With the soaring prices of residence certificates, essential for the “release” of the state mortgage on social housing, the Ministry of the Interior is stepping up its efforts to counter fraudulent practices. These documents, which confirm that the property is used as a primary residence for four years, are now the target of fraudster networks.

Relevant certificates, such as residence certificates, are among the documents required to enable the “release” of the state mortgage on social housing. They certify that the applicant has used the property as their primary residence for the past four years. However, fraud networks exploit the increase in demand during periods of high migration, especially in the summer when migrants return to their home countries, to raise the cost of these certificates to exorbitant prices, often exceeding Dh3,000.

The Ministry of Interior has recently stepped up its efforts to combat these illegal practices. Directives have been issued to local authorities and administrative officials to strengthen monitoring of the issuance of these certificates.

Governors and prefects have been tasked with monitoring and verifying the procedures for obtaining the certificates necessary for the application for the “release” of social housing. The aim of this supervision is to ensure that the procedures comply with the conditions established by the current hybrid support system, which combines an old VAT exemption with a new direct housing support.

Composed of intermediaries and brokers, and sometimes involving civil servants, these networks exploit a major loophole: users’ national identity cards do not mention the address of the person concerned. By exploiting this gap, they force applicants to pay large sums of money to obtain the required certificates.

Current regulations require that beneficiaries of public aid do not own any other real estate registered in their name, and they must provide proof of this. In addition, buyers of social housing benefiting from the VAT exemption are only allowed to resell their property after a period of four years, and only after obtaining the “release” certificate issued by the tax authorities. In the event of failure to comply with these requirements, beneficiaries will have to pay the exempted VAT, as well as late payment penalties and recovery costs. In addition, the property must be reserved for a primary residence and cannot be rented or used for other purposes, under penalty of losing the benefits granted.

The Interior Ministry introduced the new measure in response to increasing cases of fraud involving state-funded social housing. It has been observed that some individuals are buying these apartments to rent them out or use them as second homes, particularly in coastal towns.

These are mainly abusive practices aimed at exploiting the VAT tax exemptions offered by the government. After four years, the beneficiaries of these subsidies turn to intermediaries to obtain residence certificates attesting that they have actually occupied the housing they received under the social housing programs.

Beyond the monitoring of administrative certificates, the Directorate General of Taxes (DGI) has strengthened controls of documents presented to obtain “release” certificates, particularly in coastal areas that are very busy during the summer. As a result, many people buy apartments in these areas to rent them out during the summer period and are forced to obtain residence certificates at all costs, often through broker networks.