Property Tax In Egypt

Property Tax

Today, taxes on the sale of real estate bear no relation to standard property taxes or real estate registration fees in other countries. The Egyptian government is currently debating a reform of property registration fees and is proposing to impose international-standard on property tax in Egypt.

Tax From The Sale of Property

In terms of property in Egypt, the sale of land and/or buildings is taxed in the same way and the system is very simple. Tax is chargeable at 2.5% of money earned from a sale and it must be filed as tax owed by April 1st. For example: an individual or corporation selling a piece of land for LE 100,000 must file a tax return by March 31st stating that LE 2,500 is owed in taxes.

The only exceptions (under Article 42) are income from the sale of inherited land or other real estate is tax which are free, as is any income earned from the sale of land or other real estate you own through a shared capital company, provided you keep your shares in the company for at least five years after the sale. This last provision is designed to prevent the formation of “paper” companies to dodge tax liabilities from the sale of properties.

Stamp Duty / Capital Gains Tax / Inheritance Tax

In Egypt there is no stamp duty or capital gains tax payable on real estate and, if you are a British resident, you will also avoid inheritance tax on any Egyptian properties that you decide to pass on to your loved ones.

Tax on Rental Received

Any person, partnership or company must file a tax return detailing all rent or other income derived from real estate by March 31st of each year. For rental income the basic threshold for taxation is LE 5,000 per annum and, provided your rental income is less than this figure, you need not declare your received income.

For rental incomes greater than LE 5,000, 50% of the total amount is tax-free to cover maintenance and other expenses associated with owning the property. The balance is taxable at a standard rate of up to 20% rate of personal and corporate income. For example, you rent out a flat for LE 8,000 per month, grossing LE 96,000 in rental income per year. Simply subtract the deduction against costs of 50%, leaving LE 48,000 as taxable income. The balance owed in taxes is LE 6,100.