"Cottage" on the Red Sea
The year-round summer, the warm sea with the richest flora and fauna, the ancient monuments that excite the imagination – all this attracts foreign visitors to Egypt, both tourists and those who decide to buy here real estate. Of course, it is important that housing prices in the country are still affordable.
The most budget apartment in Hurghada can be purchased for, say, $15,000-20,000. On the first line there is a studio of about 65 sq. m. A one-bedroom apartment or apartment will cost about 50,000–60,000 dollars.
There are much fewer facilities being built in Sharm el-Sheikh, so housing on this coast is more expensive. Minimum cost: 30,000–35,000 dollars.
It should be borne in mind that the status of real estate ownership, which is available to non-residents, is different in these two popular resorts. If you purchase a freehold property in Hurghada, then in Sharm el-Sheikh, as in the entire Sinai Peninsula, a foreigner can issue a usufruct for 99 years or a long-term lease.
According to realtors, among foreign buyers of apartments and houses in Egypt, citizens of Russia, Ukraine, Moldova, Great Britain, Germany, the Czech Republic, and Slovakia predominate. Many people thus realize the dream of a house by the sea, where they can periodically come on vacation, and rent out the rest of the time. There are also especially heat-loving Europeans who move here with their families for permanent residence. A separate category of real estate purchasers is pensioners. They choose a southern country to live in a resort all year round.
Real estate purchase procedure
Foreigners can purchase an apartment in Egypt from both the developer and the owner, having only a passport and the necessary amount.
Contract and settlements
After a suitable option is found, the buyer fills out the reservation unit form and makes a deposit, which can range from $ 1,000 to 10% of the cost of the object. The next stage is the conclusion of a purchase and sale agreement in two languages, Arabic and the buyer's native language.
After signing the contract, the remaining amount is paid, either in cashless form or in cash.
Realtors in Egypt note that Russian citizens have difficulties transferring funds from Russian banks, but transactions still take place.
In most cases, developers provide interest-free installments until the end of the construction of the house, and often for a further period, up to 5 years in total. Sometimes a person already uses an apartment, rents it out, while still not paying off the company in full, which, of course, is convenient and profitable.
In the secondary market, payment must be made immediately, without long installments. Mortgages for non-residents are also not provided.
Documents confirming ownership
After the cost of the apartment or house is paid in full, the seller issues a general power of attorney to the buyer, the so-called "taukil". Although officially in Egypt, the document confirming ownership of real estate is a contract of sale, without "taukil" it will not be possible to resell the object in the future. If there is no power of attorney, you will need to contact the developer again for resale.
Additional expenses
The buyer, as a rule, resorts to the services of a lawyer. If the deal is on the secondary market, it will cost from $ 300, on the primary market it is cheaper, because the contract is standard for a whole pool of apartments. Saving on legal aid is definitely not worth it, since possible problems with documents can result in much higher costs.
In Sharm el-Sheikh, the buyer pays a commission to the agency in the amount of 2.5%, in Hurghada, most often these costs fall on the seller.
Already at the final stage, the new owner of the apartment will have to pay about $ 200 for the renewal of water and electricity meters.
There is an annual tax on the ownership of real estate. It varies depending on the area and the cadastral value of the object and ranges from about $ 40 per year.
Pitfalls
The real estate market in Egypt is not transparent, as there is no unified register of homeowners in the country yet. In addition, there is a risk of running into an unscrupulous developer. Of course, the authorities are taking steps to regulate the activities of developers and create a comfortable and safe environment for investors, both local and foreign. At the end of June 2022, the government unveiled a bill obliging companies to open separate accounts for different projects, as well as provide an annual and semi-annual report on their activities. Before that, during the pandemic, when all construction sites were frozen for eight months, state regulatory authorities conducted an audit of development companies. The situation is changing for the better, but foreign buyers should not lose their vigilance.
When buying ready-made housing, it is also necessary to take into account possible hidden threats. You should be wary if the value of a house for sale is significantly lower than the market value. This may be an object for which there have already been legal disputes between the previous owners. Another situation that you may not suspect, but your realtor should know for sure, is that the apartment looks neat and renovated, but in fact there was an accident in the house, flooding, and mold is hiding under fresh layers of paint.
It would also be useful to make sure that the previous owner has paid off all utility debts.
There are common cases when an error is made during the registration of a general power of attorney, accidentally or intentionally. Most importantly, the "tawkil" must be issued to the person who purchases the property.
And the last thing that realtors strongly recommend to remember is that you should not unconditionally trust local friends. Sometimes their help is based on the desire to earn extra money at the expense of a gullible foreigner.
Despite the difficult moments that actually always take place when buying real estate abroad, it is quite possible to become the happy owner of an apartment or villa in Egypt. The traditional advice to buyers is to contact one of the agencies that has been working in the local market for a long time. As a rule, realtors cooperate with strong, trusted lawyers who will help avoid pitfalls.
Resident visa in Egypt
With a tourist visa, which is issued on arrival for $ 25, foreigners can stay in Egypt for a month. Then Russians have the right to extend it for another 2 months (conditions differ for citizens of different countries).
It is quite easy to apply for a long-term residence visa on the basis of a lease or purchase and sale agreement for real estate. It is usually issued for six months, and then extended. However, sometimes foreigners permanently residing in Egypt cannot extend their visa in time and are forced to fly abroad within a few days so that the period of their legal stay in the country is reset.
It should be noted that in Egypt there is also a program for obtaining a passport for investments. You can become a citizen of the state by buying real estate worth at least $ 500,000, but only from a state developer. In practice, there are very few such requests.
Thank you for your help in preparing the material:
Maria Chernikova, DirectorMy Real Estate
Zinaida Mazur, DirectorSunResidence
