Today, Egypt has a tax system that is loyal to foreign investors. Over the past few years, the government of the country has abolished a number of taxes on the purchase of real estate by foreigners, and also made the procedure for state registration of property for local real estate acquired by citizens of other countries as easy as possible. Thus, the process of buying a home in Egypt by locals and foreigners now differs slightly.
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Purchase taxes
You can register property in Egypt with a notary - this will be enough to become the full owner of the acquired object. Many foreigners often additionally fix the deal in the city court, but such a voluntary procedure will cost the buyer a state duty of 3%, and a payment for the services of a lawyer in the amount of 2-3% of the cost of the apartment. The process of registering property in a city court can take from four months to one year. You can also register real estate by registering an object with the registration chamber, where it is assigned a number. However, subsequently, the buyer will be able to sell the acquired object only after five years.
A one-time tax when making a purchase of real estate is borne by the buyer - its amount depends on the area of the object. If it is less than 100 square meters, then it will be necessary to pay 1000 Egyptian pounds (about 180 dollars), if 100-200 square meters - 2000 pounds (about 360 dollars).
Ownership tax
After the owner of the property is registered with the tax office, he is obliged to submit a declaration of ownership annually. And the size of the tax amount depends on a progressive scale, which is calculated every five years. But even if it changes, it cannot be increased by more than 30%. The total amount depends on the estimated rent for the object (even if the house is not rented out) - the owner pays 10% of this amount. Maintenance costs are deducted from it: if it is residential real estate, then it will be 30% less, with the option of commercial square meters - by 32%.
It does not have to be the same as the one that you can actually get by renting out your apartment. It is established by a special commission, which includes representatives of the Egyptian Property Tax Administration, the city hall and the taxpayers' council of the region. The commission has its own formulas, which take into account the year and quality of construction, the area and type of house, as well as the area of the apartment.
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If the appraised rental value of the apartment for the year is less than 24,000 Egyptian pounds (about $ 1,500) and it is the owner's primary residence, then he is exempt from paying tax. To do this, he needs to provide a tax copy of the declaration on real estate, which will indicate all the real estate that is in his ownership, as well as a statement that will indicate exactly where he lives.
Property tax for foreigners in Egypt exists, but it is insignificant: such an owner pays about $ 0.13 per sqm per year. That is, for an object with an area of 100 square meters, you will need to pay about $ 13 annually. Payment must be made twice a year: before June 1 and before December 31, a receipt for payment comes by mail.
The penalty for late payment of taxes is calculated based on the discount rate of the Central Bank of Egypt, to which 2% of the outstanding amount is added. It will be extremely difficult to sell an apartment with a debt on real estate tax, since a certificate of absence of debt is now included in the package of mandatory documents.
Communal payments
The size of utilities in Egypt is significantly lower than in many countries. Typically, maintenance costs for a two-bedroom apartment are $ 20 per month. This amount includes fees for water, sewerage, electricity, garbage collection, concierge services. Gas, usually imported, costs about 5 (less than $ 1) per cylinder. Operating charges for the maintenance of swimming pools, sports fields, landscaping, etc. in residential complexes average $ 100-140 per year.
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Gift and inheritance tax
In Egypt, there is no inheritance tax - you only need to pay the cost of registering the property. In the case when the issue of transferring property as a gift is being considered, an amount of 2.5% of the value of the object is paid. This tax is also applied when transferring property to a husband or wife, children and parents.
Thank you for your help in preparing the material:
Sergey Nikolaev, expert at KIKO Real Estate
Maria Chernikova, director of My Real Estate
