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New PropertyTax for Egypt
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Egypt plans to introduce new residential and commercial property taxes in January next year as part of a series of plans to help modernise the country's outdated taxation system and boost the economy - but the tax stands to have a negative impact on international investors as it may put them off buying property in the country...
Up until now, property tax in Egypt has been extremely favourable. There is no capital gains tax, no inheritance tax and no stamp duty. But now, the Egyptian Government is trying out various methods in their bid to reform the economy and they see overhauling the taxation system in the country as one way in which to do this.
Tarek Farag, Head of Egypt's Real Estate Tax Authority, said that Egypt properties valued at 1 million Egyptian pounds (£109,000) will be taxed a small tax of just under one per cent, while homes valued at £45,000 or less will be exempt from the tax altogether.
But of course the number of international investors buying properties worth under the low £45,000 threshold will be minimal, so it is likely that this new tax will affect the majority of them.
Finance Minister Youssef Boutros-Ghali said that individuals and corporations should submit real estate assets by the end of the year for valuation.
Valuations will take into account location, quality of construction, provision of basic services and proximity to public parks, health and education facilities.
If property owners feel that their homes have been valued incorrectly and they feel the taxes levied against them are unfair, then they can apply to appeal against the taxes within sixty days of the valuation and their home will be revalued within 30 days.
Properties will be re-evaluated every five years.
Taxes on industrial real estate would be deducted from the overall income tax paid by the owners.
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