New Property Tax Law

[Zeiad Yehia]

Originally Posted by dave99

How will the rental income be estimated, and who will do it.

How will the local government even know about the property if it is not registered.

How will anyone know how the property cost to decide if it above the threshold for value (400,000 EGP).
.

Please note that the local tax authorities will send committees to each area to scan and estimate the properties, according to the prevalent prices in the said area. A sale / usufruct contract will be a good assisting factor in this endeavour, yet in the event the price in the sale/usufruct contract was significantly different than the prevalent prices in the area, the latter will apply. Same goes for estimating the rental value. Information on the property owners are sent regularly to the tax authorities by developers (already), and this is how they will locate the current and legitimate owner.

It is very important to mention that the aforementioned tax law is NOT EFFECTIVE yet, but subject to discussion and amendment. The information I am writing here are obtained directly from the tax authorities, while they -themselves- are waiting for any potential amendments to the abovementioned regulations, since this law is not yet in effect, and is not yet published in the official newspapers "Al Wakaea Al Mesreyya"; the official newspaper dedicated for publishing new laws, whereas laws cannot be effective without being published there beforehand as a constitutional rule.

Consequently all what we can do regarding this law at the moment is to wait, since it can be amended at any point.

When it is officially issued and published, an interpretive bill will be issued, elucidating the exact procedures utilized over the inspection and execution process.


Al the best,

Zeiad Yehia
Solicitor

[Zeiad Yehia]

Thanks Queenie.

[queenie40something]

Your welcome and thanks for your post. That is exactly the info I was looking for.

[sinaiscuba]

I own apartment in Delta Sharm which has been rented in long term, private contract. Delta management is not involved. Last days my tenant while paying utilities was asked to pay Building Tax, which is 680LE/6mths (2 bed apt.).

Does anybody know anything about this tax in Egypt? All I heard is that Egyptian Government has plans to introduce such tax but since next year.

[Georgina]

Originally Posted by sinaiscuba

I own apartment in Delta Sharm which has been rented in long term, private contract. Delta management is not involved. Last days my tenant while paying utilities was asked to pay Building Tax, which is 680LE/6mths (2 bed apt.).

Does anybody know anything about this tax in Egypt? All I heard is that Egyptian Government has plans to introduce such tax but since next year.

I found this on the internet:

4.2. Building tax
Building tax is imposed on permanent structures located in
certain prescribed areas, and is not dependent on whether
the building is occupied or whether any actual income is
derived from the building. Buildings belonging to the
government and public enterprises are exempted from this
tax.

The tax base is determined according to the rental value of
the building and as with agricultural land, the rental
value is estimated by the tax authority. The tax authority
reviews the rental value every 10 years. The landlord is
responsible for the tax liability and he/she is required to
remit the estimated tax amount on an annual basis to the
tax authority.

It is imposed by Law No 56 of 1954.

The building tax is a progressive tax that ranges from 10%
to 40%.

[sinaiscuba]

Okey, but do I have to pay tax if my property is not registered yet? Well, whole Delta complex is not registered so why their management is asking to pay that tax?

Originally Posted by sinaiscuba

Okey, but do I have to pay tax if my property is not registered yet? Well, whole Delta complex is not registered so why their management is asking to pay that tax?

Maybe worth leaving a post for Zeiad on the legal thread regarding this. I'm interested to know what this is all about too.

[sinaiscuba]

I already texted and e-mailed to Mr. Zeiad asking about Building Tax couple days ago (btw. he is my lawyer), however until today without answer.

My other friends who own apartment at Delta either, they haven't heard anything about Building Tax payment. Maybe because their apt. is empty now. I really don't know.

Payment is due on 31.12.2008. I just need to clarify what is all about.

[anokayperson]

I think many people would be interested in knowing about this tax.

[M Butler]

I would like to know as well.

I was under the impression that one of the main reasons for non registration of property in Egypt was to avoid tax.

Margaret