A Buyers' Guide To Egypt

Foreign purchasers have the right to own real estate and land in Egypt. Today the government recognizes the great value foreign investors in property have for the success of the economy and have set about actively encouraging overseas buyers to Egypt. New laws have been established to make the Egyptian property purchase procedure more secure. For example, the government can no longer impound or nationalize any property they wish – a practice that stood for centuries. These changes, along with a few others, are increasing confidence amongst overseas buyers.

We will gladly guide your through the purchase process in Egypt to ensure you are fully informed of the facts to avoid any potential pitfalls. Click here to speak to a specialist.

Once you decide on a property, you will need to pay a holding deposit to take the property off the market while contracts are drawn up.

It is completely usual to negotiate a property’s selling price in Egypt, unless you are buying off-plan when the price is fixed.

Lawyers

Lawyers in Egypt will normally speak English and will be able to produce your necessary paperwork in Arabic, as required by all the authorities. Egypt has many complex real estate registration issues so it is critical to have a lawyer conduct the appropriate searches and provide you with legal advice regarding the purchase.

Local lawyers will also help you through the best way to conduct business with the local people who have their own particular idiosyncrasies and customs which are important to be aware of.

Fees and Taxes

Property registration and legal fees for conveyance total around 6%.
Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).

Tax on any form of income from property runs at 20 to 22% and is basically the alternative to Value Added Tax. Many countries enjoy a double taxation treaty with Egypt.

Egypt levies no inheritance or capital gains taxes.

Registration

Most Egyptian properties are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer’s assistance in liaising with the Real Estate Registration Office in Egypt is essential in order to ensure the property is duly registered and prepared for foreign purchase. Registration can take up to four months. After inspections and payment of taxes/fees, you will finally obtain a new title from the Registry.

Mortgages

Mortgage facilities are at last available to foreigners in Egypt, and this is expected to open up the property market considerably. Foreigners can now obtain Egyptian pound mortgages for loans of up to 85% LTV and lending can extend to 30 years or up to the maximum age of 65. Monthly installments must not exceed 25% of your monthly income. Currently the interest rate stands at around 14% p.a. so many buyers still prefer to seek alternative means of finance.

Some investors choose to free up equity in their country of residence via a re-mortgage or equity release scheme. In this way, property in Egypt can sometimes be bought outright.

The current lack of a fully developed lending system has, until now, slowed the construction industry in Egypt, even though Cairo is one of the most densely populated cities in the world and the need for new housing is starkly apparent. This situation is destined to change, now that mortgage facilities have become more commonplace.

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