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Monday, 18 November 2019

Two LE100,000 properties taxed; LE2,000,000 property exempt

New rules exempt properties worth up to LE2 million, with multiple property owners paying on second and others

Marwa Hussein, Monday 1 Sep 2014
The family has the right to choose to exempt the more expensive accommodation (Photo: Al-Ahram)
Views: 1511
Views: 1511

Egyptian families will be exempted from paying tax on one property worth up to LE2 million ($290,000), according to new tax rules announced by the finance ministry.

However, families owning more than one property will pay taxes on all the others, even if the total cost of their properties is below the exemption level (LE2 million).

"No law could satisfy everybody. Some benefit more than others, that is quite normal," head of the Real Estate Tax Authority, Tarek Farrag, told Ahram Online.

He added that the sums at stake are low and will not affect the budget of a middle class family.

"Usually those who own more than one home will be renting them out. This way the law will encourage people with non-utilised properties to rent them out, which is good for the market."

The tax imposed on a property worth LE100,000 ($14,000) will be LE126 ($17,7) per year.

"Each family has the right to exempt their most expensive property," said Farrag.

The law defines a family as spouses and their minor children.

The state treasury might pay the tax imposed on a private property if the ratepayer cannot afford it, Finance Minister Hany Kadry Demian said.

Citizens who want to be helped by the treasury should present a request to Real Estate Tax Authority, which will then refer them to a specified committee headed by a State Council (administrative court) judge.

Last month Egypt's President Abdel-Fattah El-Sisi ratified amendments to the property tax law which will go into effect retroactively from July 2013.

The application of the property tax law, promulgated originally in 2008, has been repeatedly postponed and amended over the past years.

The law fixes the tax at 10 percent of the rental value of a dwelling whose monthly rent exceeds LE2,000 per month. From this figure, 30 percent will be deducted to cover maintenance expenses and then LE6,000 exempted.

For example:

Dwelling Value           Annual tax (In LE)

100,000                        126

500,000                        630

1,000,000                     1,260

2,000,000                     2,520

4,000,000                     5,040

6,000,000                     7,560

8,000,000                    10,080

10,000,000                  12,600 

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